RBA Forecasts Inflation Peak in Mid-2026

Understanding the Reserve Bank's Inflation Forecast and Its Implications

RBA Projects Mid-2026 Inflation Peak with Gradual Decline?w=400

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The Reserve Bank of Australia (RBA) has projected that inflation will reach its peak in mid-2026, subsequently moderating to slightly above the midpoint of its 2-3% target range by mid-2028.

This forecast suggests a gradual return to economic balance over the coming years.

Michael Plumb, head of the RBA's economic analysis department, indicated that the recent uptick in inflation is primarily driven by sector-specific pressures, which are expected to ease in the near future. This perspective offers a more optimistic outlook compared to previous statements from the RBA board.

In late 2022, inflation had eased to 2.7% by the June quarter of 2025. However, an unexpected acceleration in mid-2025 prompted the RBA to raise interest rates to 3.85% in February 2026, aiming to curb inflationary pressures.

For Australian consumers and businesses, this forecast implies that while inflationary pressures may persist in the short term, a gradual easing is anticipated. This outlook could influence financial planning, investment decisions, and policy considerations in the coming years.

Published:Monday, 30th Mar 2026
Author: Paige Estritori

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