Philip Lowe: Price stability, the supply side and prosperity

Address by Mr Philip Lowe, Governor of the Reserve Bank of Australia, at the Committee for Economic Development of Australia Annual Dinner, Melbourne, 22 November 2022.

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

Central bank speech  | 
22 November 2022

It is an honour to be able to continue the tradition of the RBA Governor addressing CEDA's Annual Dinner. Thank you very much for the invitation.

This is the first time in many years that your annual dinner is being held against the backdrop of high inflation. For most of the past decade the issue was that inflation was a bit too low, not too high. And for the couple of decades before that, inflation varied from year to year, but averaged 2½ per cent in Australia. An inflation rate of 7 or 8 per cent was something that was widely thought to be consigned to the history books. So the current bout of high inflation has come as quite a shock.

I would like to begin this evening by emphasising the importance of ensuring that this episode of high inflation is only temporary. I will then discuss some reasons why inflation might be more variable over the years ahead and the implications of this for economic policy. Finally, I will say a few words about the Reserve Bank Board's recent policy decisions.