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Aggressive tightening will weigh on activity

With inflation remaining very sticky, we now expect the RBA to lift the cash rate to a peak of 4.85% by September, whereas we suspect that the RBNZ is done tightening. Extremely tight monetary policy will result in falling output in both countries across the second half of the year.

Asia Drop-In (22nd June): We’re discussing inflation and the BOJ, slowing Indian growth and the next regional central bank to cut rates in our latest 20-minute briefing on the region’s big macro and market stories. Register now.

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