RBA predicts weaker economy for the rest of 2023 as cost of living pummels households

The Reserve Bank's latest update predicts a retreat in GDP per capita but rent inflation will increase

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Australia's economic output per person is forecast to shrink in the second half of 2023 as higher interest rates and the rising cost of living combine to pummel households, the Reserve Bank says in its latest update on the economy.

Wage increases have remained steady at an annual rate of about 3.7% across the first six months of this year, and will quicken modestly to about 4.1% by the year's end, the RBA said its quarterly statement on monetary policy, released on Friday.