The implicitly derived number from the high growth and low inflation phase of 2003–08 works out to 1.1 per cent per annum (Table 1). For the purpose of this exercise we have assumed it to be 1 per cent.
Combined with our first assumption of desired level of inflation of 5.0 per cent, it will imply that the neutral nominal policy rate could be assumed around 6.0 per cent per annum.