Higher vaccine levels are driving a faster economic recovery, as virus plagued states and territories begin to awaken from the shutdown slumber.
Latest minutes from the Reserve Bank's meeting on monetary policy has revealed a dovish outlook due to high vaccination rates which are allowing restrictions to eased at a rate faster than what the central bank had initially predicted.
Revelations of quicker start to the fourth quarter recovery are in light of the ACT surpassing the 80 per cent double dose vaccination target and the national average almost hitting 70 per cent.
The RBA minutes noted a quicker than expected reopening of international borders by November and state and territory plans to open by Christmas would assist the acceleration of economic growth following the expected dent to occur in the September quarter.
"High vaccination rates had allowed restrictions on activity to be eased, which was supporting business conditions and, in turn, the demand for labour," the RBA said.
"The publication of roadmaps by some states had provided more clarity over the sequencing and pace of economic reopening."
Westpac chief economist Bill Evans flagged the central bank was hinting of potential policy changes due to inflation rising faster than expected
"There is evidence in the minutes that the board has discussed the possibility that inflation could lift more quickly than their central forecast," Mr Evans said.
Westpac's central forecast of an interest rate hike is the March quarter of 2023, however the RBA is standing firm it will not happen until at least the beginning of 2024.
ANZ economist David Plank in a note said there was suggestion the RBA in coming months could revise forecasts on Australia's economic outlook, particularly on wages growth and inflation.
"The market is now building in the strong expectation that the RBA will soon shift in this expectation," Mr Plank said.
"For the RBA to shift away from this view will likely take quite a lot of data that indicates it is no longer correct. This will take time to accumulate even if the observations made in the minutes are no longer true."
The RBA during its meeting also revealed it is monitoring the slowdown of the Chinese economy and the liquidity risks caused by the collapse of property giant Evergrande.
It noted China's recent "common prosperity" stance was creating more uncertainty around the policy settings of the major economy.
"While Evergrande is small relative to the financial system in China, members noted a financial stability risk from spillovers to other developers and financiers if the resolution of Evergrande's problems were to be disorderly," the RBA said.
"A deterioration in confidence in developers could see a sharp withdrawal of credit provided to the sector and a decline in pre-sales, placing them under further stress."
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