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.

Underlying data for selected graphs. Other data may be available upon request via our general enquiry page.

Some graphs in this publication were generated using Mathematica.

ISSN 1448–5141