By Chris Oliver, MarketWatch HONG KONG (MarketWatch) -- The Reserve Bank of Australia on Friday lifted its forecast for inflation and economic growth, adding some support under the central bank's current policy tightening. Consumer prices are now forecast to rise to 3.25% year-on-year by June, up from a 2.1% annual rise in December, and above the Reserve Bank's target range of 2% to 3%, the central bank said in a statement. In previous forecasts, the RBA had said it expected consumer price inflation to stay within its target band. The central bank also said gross domestic product is now estimated to grow 4% through 2012, up from previous projections of 3.5% this year and 3.75% next year. The RBA cautioned, however, that excluding the mining sector, growth in the broader economy won't be quite so robust, because currency appreciation will hurt competitiveness and dampen prospects for the manufacturing and tourism sectors. While the RBA's new forecasts appeared to support further rate hikes, Reuters reported Friday that futures markets have priced out any further increases until at least October, due to worries over the European debt crisis and possible spill-over into the global economy.

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