The politics of falling inflation has been clear – lower is better. But Australia should beware its flip side: slow growth | Reserve Bank of Australia

If you believe in the less reliable monthly version, there is a lot in the latest inflation figures that fall to 2.1% per year and even fall to 1.9%.

In two and a half years since inflation reached approximately 8%, we have certainly a long way.

The most prominent package is that the reserve bank board will definitely reduce the cash rate on August 12th.

Michele Bullock, the governor of the Central Bank, has made it clear that previously on the Monetary Policy Board expects more comfort that inflation is expected. They are now.

In particular, the “underlying” inflation rate preferred by the Central Bank reached 2.9% from 2.9%. This measure excludes the variable movements in the price of gasoline, fruits and vegetables and electricity, and is compatible with the place where the economists of RBA think this will happen.

That is, there is no convincing argument to avoid lowering rates (as well as its impact on the housing market rapidly).

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Economists are participating. Stephen Smith, a partner of Deloitte Access Economics, said that interest rates are a break to the economy and that it is right considering the ongoing global economic volatility and the ongoing recession of our own internal economy ”.

It was not surprising that Jim Chalmers saluted ABS’s latest consumer price report as “striking” and “absolutely extraordinarily olmada after Labour made a number an enemy of the high inflation during the first government.

The upcoming economic reform round table occupies most of the attention of the Treasurer, so of course it prefers not to be forced to fight a back guard against yesterday’s bad guys.

But the other appears on the horizon.

The politics and economy of falling inflation were clear: lower. However, it is worth remembering the other side of low inflation with slow growth.

While the Australian economy expanded only 0.2% in the first three months of this year, the annual growth stopped by 1.3%. Households are careful to open their wallets that were dragged into consumption in 2025. In 2024, the growth of government expenditures that support the activity is decreasing.

Is this just 2% of the alloy good news or a little concern?

“Obviously, our economy is growing as quickly as we want,” the Chalmers accepted during a gate in the parliamentary Assembly.

“We pay attention to these cyclical problems [such as] Weaker growth is riding on inflation, Chalmers said.

“But we are also increasingly focusing on larger structural problems – the increase in productivity in our economy, international difficulty.”

The last thing we need as a country as much as it wants to focus on the future is that low growth, low inflation, low -paid world before my pande.

The economic effects of dysflation may change and may have political effects on it.