Year ends (plus a lull in market-moving economic news in western economies, at least) present an ineluctable opportunity to highlight the ill forecasts of the 12 months previous and attempt to extract lessons for the year to come.
Here, though, are some of the safer bets to make for 2023.
ANZ and Westpac both expect the RBA to lift its cash rate from 3.1% now to a peak of 3.85% in 2023. The CBA and NAB, the other two big banks, predict the central bank will be done at 3.35% and 3.6%, respectively. Investors were lately tipping a top rate of 4%.
Each rate rise of 25 basis points adds about $75 to monthly repayments on a typical 25-year, $500,000 mortgage, according to RateCity. The 300bp increase since May has added about $834.
Many of those on fixed interest rates are yet to feel the impact. But as Sally Tindall, the head of research at RateCity, noted last month that about one in three outstanding home loans are on fixed terms and about two-thirds of these are due to expire by the end of 2023. For such borrowers, higher rates are unavoidable.
Higher borrowing costs aimed at sapping demand from households and businesses alike mean major economies are likely to slow if not contract in 2023.
Even if a rising population will mean per-capita GDP growth may end up close to zero or even feel recessionary, the abundance of jobs in Australia amid half-century lows in unemployment is one cause for optimism.
The RBA tips the jobless rate to remain at about 3.5%, or close to current levels, until mid-2023. By the end of 2024, it may still be about 4.25%, a level any treasurer since the early 1970s would have happily accepted.
Rising interest rates expose companies (and households) who have borrowed too much, so an increase in insolvencies appears to be another given in 2023.
Leaving aside petrol and diesel prices that gyrate with global fluctuations, prices of gas and electricity will rise further in 2023.
Treasury estimates power prices in the 2023-24 fiscal year will still rise 23%, a steep increase but better than the 36% its modelling suggests would have been the case without the foray into markets that some derived as Soviet-lite or even Armageddon.
