The June quarter GDP figures released yesterday reveal just how badly the Reserve Bank has misread the economy. Its decision to sharply raise interest rates has not only failed to reduce inflation but delivered an economy reliant on population growth and government spending to stop it from going into a recession.
A month ago, when announcing the bank would keep rates on hold, the RBA governor, Michele Bullock, told the media that “the board does remain concerned about the degree of excess demand in the economy”.
