Philip Lowe: The year ahead

Address by Mr Philip Lowe, Governor of the Reserve Bank of Australia, to the National Press Club of Australia, Sydney, 2 February 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

This is the fourth time that I have addressed the National Press Club. Thank you for having me back. As I've done on each of the three previous occasions, I have titled my remarks 'The Year Ahead'. I will talk about our latest forecasts, the outlook for monetary policy and yesterday's decision by the Reserve Bank Board to end the bond purchase program.

In summary, I remain optimistic about Australia's prospects. Our economy has weathered the pandemic much better than was expected, jobs growth is strong and unemployment is low, household and business balance sheets are generally in good shape and wages growth is picking up. These are all welcome developments.

At the same time, though, the country faces challenges. The pandemic is not yet behind us and the sharp pick-up in inflation in some parts of the world, particularly in the United States, has added a new element of uncertainty to the outlook. We also face the challenge of lifting productivity growth, including through investing in the workforce skills and technologies that are needed to generate sustained increases in real wages. And over time and as conditions allow, we will need to navigate a return to more normal settings of monetary policy.