In particular, the high unemployment rate will mean that wage growth, which was not strong pre-pandemic, will remain subdued. As wage costs are a major factor affecting prices, inflation will remain contained for some time.
Moreover, the declines in rents that were evident in the June quarter as a large amount of extra supply came into the rental market are also likely to persist and will also restrain inflation. We are now nearing the end of the September quarter. How is the Australian economy evolving after that large decline in output?