Budget 2022 unlikely to move the needle for the Bank

The government announced a smorgasbord of new policies in the 2022 Budget, but the total increase in the budget deficit, at just $7bn, was arguably far lower than some feared. Moreover, as most of the funds are being allocated to new investments, rather than fiscal transfers, they do not pose much of an additional upside risk to inflation and shouldn’t materially affect the outlook for monetary policy.