NAB Reveals Business Conditions Index Slightly Lower Due to Slowing Inflationary Pressure

The National Australia Bank (NAB) has announced that its business conditions index saw a slight decline in December, as inflationary pressure began to ease. According to the bank, it is likely that Australia’s inflation rate may have peaked.

The NAB reported that the Australian Business Conditions Index dropped 8 points to +12 points in December. Although the index has dropped for the third consecutive month, it remains above the long-term average.

The business sentiment index for December rose 3 points to -1 point, but the index remained in negative territory for the second consecutive month. Overall, the NAB states that economic activity remained at a good level, with the business conditions index remaining above average and the rate of capacity utilization increasing rapidly.

A positive sign from this survey is that inflationary pressure has slowed down in all sectors. This information will influence the decision of the Reserve Bank of Australia’s (RBA) Monetary Policy Committee at its meeting next Tuesday. Financial markets are currently still expecting the RBA to raise interest rates by 0.25% from the current 3.1%. There is about a 40% chance that the RBA will end its rate hike cycle after raising rates collectively by 3% since May last year.

Leave a Reply

Change Language
%d bloggers like this: