SYDNEY: Australia's central bank will bring forward its policy tightening cycle and start raising interest rates early in 2023, Westpac economists forecast in a change of view.

In a note, Westpac chief economist Bill Evans argued that the upbeat May jobs report released this week was a 'game changer' for the Reserve Bank of Australia (RBA) as it underlined the strength of momentum in the economy.

"We now expect that the RBA will assess that it has achieved the conditions necessary for the first interest rate hike by the first quarter of 2023," said Evans.

He looked for an increase in the 0.1% cash rate of 15 basis points in Q1, followed by 25 basis points in Q2 and 25 basis points in Q4. The RBA has repeatedly stated a rate hike was unlikely before 2024 at the earliest.