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The dynamics of wages growth can differ across pay-setting methods. Understanding these differences is relevant for forecasting wages growth, and for assessing labour market conditions and inflationary pressures. Across each pay-setting method, wages growth picked up following the COVID-19 pandemic, but appears to have peaked. Wages growth is expected to…

The economic environment has been challenging for many small businesses over the past year. Growth in demand has slowed while input costs remain elevated, putting pressure on profitability – particularly for businesses reliant on discretionary consumer spending. Even so, profit margins remain around pre-pandemic averages for most small businesses. While…

Australians are increasingly dependent on the continuous availability of electronic payment systems. As such, every incident or outage can potentially cause inconvenience or economic harm for end-users of those systems. This article presents insights into the reliability of payment systems using information from the RBA’s retail payment incidents dataset. The…

Financial instruments with returns that are indexed to inflation allow market participants to hedge against or take positions on future inflation. Inflation-linked bond and swap markets in Australia are small and not very liquid relative to some other advanced economies. Nevertheless, pricing in these markets can provide valuable information about…

Global private credit has grown rapidly over the past two decades, providing an alternative source of financing for businesses. This article introduces a new estimate of the size of private credit outstanding in Australia, based on data collected by the Australian Prudential Regulation Authority and London Stock Exchange Group. It…

Components for GDP on the expenditure side of the national accounts – expenditure on consumption, investment (including inventories) and exports less imports – can provide an important read on the composition of demand. For China, these components are available in contributions to year-ended GDP growth, which provides insight into trends…

China’s local government financing vehicles (LGFVs) are a key feature – and risk – of China’s infrastructure investment and financing environment. The scale of their debt has consequences for local governments’ fiscal sustainability and for capacity to continue financing infrastructure development. This article reviews progress and challenges in the transformation…

Interest rates and rents often move together. Some have argued that this positive relationship is evidence that higher interest rates have been a key driver of increases in rents over the past few years, due to leveraged housing investors passing through increases in their interest costs to their tenants. This…

The output gap – the difference between actual output and potential output – is an important consideration for monetary policy as it is a measure of the extent of spare capacity in the economy. This article explains how RBA staff form an assessment of potential output and the output gap….

The strength in labour market conditions after the COVID-19 pandemic caused many individuals to either enter the labour market or to change jobs. These labour dynamics may have an influence on both recent and longer term productivity outcomes by affecting how well workers’ skills are matched to their new jobs….