Economists say federal budget unlikely to have much effect on interest rates

While the 2023 budget is unlikely to budge the RBA, experts are watching for inflationary pressure from a population boom and energy prices

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Economists say the federal budget is unlikely to have more than a marginal effect on the Reserve Bank of Australia's interest rate stance, but several risks remain including the inflationary effects of a population boom on rents and how energy and commodity prices play out.

The Albanese government's second budget, released last night, predicted inflation would slow from 7% in the March quarter to 6% for the April-June period and almost half that - to 3.25% - by June next year. That slowdown compared with the RBA's 3.5% prediction for the June quarter of 2024 published last Friday.

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