“It is possible, but not certain, that the Australian economy can manage a ‘soft landing’ with inflation decreasing to the RBA’s target range,” S&P Global said in its latest assessment of the Australian economy.

Additional takeaways

“The key risk is that inflation in Australia is more sticky than expected and the RBA has to hike interest rates more strongly.”

“We expect continued expansion in 2023 and 2024 and unemployment to rise moderately.”

“If the rise in Australian unemployment rate can be limited to around one percentage point, economic & financial fallout should remain manageable.”

Market reaction

AUD/USD is holding a renewed uptick above 0.6550 following the above report, adding 0.21% so far.