Australia's Economic Race: Capacity Constraints, Inflation Targets, and the Path Off the Rail | RBA Outlook
Inside the Economist’s Mind12 Nov 2025

Australia's Economic Race: Capacity Constraints, Inflation Targets, and the Path Off the Rail | RBA Outlook

Delve into the Australian economic outlook with insights derived from the speech of Andrew Hauser, Deputy Governor of the Reserve Bank of Australia (RBA). This episode explores the "unusual challenge" facing monetary policy, noting that the GDP recovery began with the highest level of capacity utilisation in over 40 years. We analyze the RBA's decision to maintain a restrictive policy stance until confidence is achieved that underlying inflation will settle sustainably at the 2–3 per cent target range.Learn about the three potential tracks the economy could take, framed by the Melbourne Cup metaphor:

1. Track A: Still ground to make up? (Policy easing may be necessary).

2. Track B: Boxed in on the rail? (Little scope for further policy easing due to capacity constraints).

3. Track C: Off to the races? (Escape through growing the economy’s supply capacity via productivity and investment).Understand why addressing weak growth in supply capacity and driving investment is crucial for Australia to avoid being "boxed in on the rail" and instead be "off to the races.

Episoder(61)

CBA vs. CEA: The Economic Evaluation Tools Shaping Government Decisions

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The Subjective Assumptions Shaping CGE Models and Australian Economic Policy

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13 Nov 202514min

RBA Rate Hold (3.60%): Australia's Persistent Inflation and Capacity Pressures | Nov 2025 SMP

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In this episode of Inside's Economist's Mind, we break down the Reserve Bank of Australia’s (RBA) decision in November 2025 to leave the cash rate target unchanged at 3.60 per cent.Drawing on the late...

12 Nov 202514min

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6 Nov 202515min

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