RBA is expected to reduce prices for the third time on July 8, with a slowdown in the economy: Reuters poll

Written by Devayani Satian

Bengalro (Reuters) -An inflation and slow economy will push the Australian Reserve Bank to reduce policy more than expected in May, according to Reuters poll to economists who expect the Central Bank to provide a reduction in the third price rate from 25 years on Tuesday.

Financial and economic markets have already expected three discounts in RBA rates this year, but then raised their expectations to four, and now you see five, which is a paid transformation with inflation that declines faster than expected and weak growth expectations.

The survey showed that the vast majority of economists, 31 out of 37, expected RBA to reduce the official cash price by 25 basis points to 3.60 % at the end of its two -day meeting on July 8.

“The May meeting was more clear in the future outlook and this will appear in the pieces in July. I think RBA will keep the option open for more mitigation, and for this reason there will be a follow -up reduction in August,” said Philip Odonago, the chief economist in Australia and New Zealand in Dithish.

“Increased inflation after inflation is largely out of the economy. So the RBA mission now is to make sure that we can get the growth that will keep the labor market strong … (so) the risks is that we see more discounts.”

More than 60 % of the respondents in the June 30-3-June survey from Reuters, 23 of 36, expected a quarter of a quarter-point cut this quarter, the money price reaches 3.35 %.

While the average average pointed to a cash price at the end of the year by 3.10 %, there was no clear consensus between the economists about where the rate will end 2025: 16 out of 33 expecting 3.10 %, 15 expected 3.35 %, each witnessed 3.60 % and 2.85 %.

The main banks were divided into Australia – Anz, CBA, NAB and Westpac – similarly, confirming uncertainty about the last station of the RBA dilution cycle.

The economy is expected to grow by 1.6 % this year and 2.3 % in 2026, which is a reduction of 2.0 % and 2.4 % of the April poll.

Official data showed that the economy has expanded by only 0.2 % in the first quarter of 2025, which is slowing from 0.6 % in Q4 2024.

“A large part of the reason that RBA has now found himself on the path of price shots is more desperate than he thought was at the beginning of the year that … consumption was more soft than RBA expected.”

Some economists reported the absence of a trade deal before the end of July 90 to temporarily stop for a period of 90 days on US President Donald Trump’s tariff for trading partners who announced in April as a negative threat to the economy and RBA rates.