Overall, our view is that after a fairly extended period of above-target inflation, we will see the CPI inflation rate moving back to its target over the next two to three years. Should demand in the economy weaken further than we expect, that would be likely to be accompanied by a downward revision to the inflation outlook.
Throughout 2012 domestic demand had been buoyant and investment continued to pick up. As a result, our labour market is finding some traction. However we are always prone to the threat of natural disasters and Cyclone Evan showed that we must not be complacent. There also continue to be risks on the external front with the recent downward revisions in global growth.