Statement on Monetary Policy May 2025

Contents

• In Brief
• Overview
• 1. In Depth – Global Economy and Financial Markets
  • Summary
  • 1.1 How has global trade policy changed since the February Statement?
  • 1.2 How do higher tariffs affect the global economy?
  • 1.3 How has fiscal and monetary policy responded so far?
  • 1.4 How have financial markets reacted to developments?
• 2. Australian Financial Conditions
  • Summary
  • 2.1 Interest rate markets
  • 2.2 Australian dollar
  • 2.3 Australian equity, credit and banking markets
• 3. Australian Economic Conditions
  • Summary
  • 3.1 Domestic economic activity
  • 3.2 Labour market and wages
  • 3.3 Assessment of spare capacity
  • 3.4 Inflation
• Box A: How Might Tariffs Affect Australian Trade?
• Box B: The Impact of the Recent Floods on the Australian Economy
• Box C: Insights from Liaison
• 4. Outlook
  • Summary
  • 4.1 The baseline forecast relative to the alternative forecast scenarios
  • 4.2 Key judgements for the baseline forecast
  • 4.3 Baseline global outlook
  • 4.4 Baseline domestic outlook
  • 4.5 Alternative scenarios
  • 4.6 Detailed forecast information

The cut-off for data used to prepare the forecasts for the Statement on Monetary Policy was 14 May 2025. The data cut-off for Chapter 3: Australian Economic Conditions was 15 May 2025.

Some graphs in this publication were generated using Mathematica.

ISSN 1448–5141