Reserve Bank can’t tackle inflation alone: Treasurer | rachelclun
Australia’s economy will crash-land if it relies on the Reserve Bank alone to curb inflation, Treasurer Jim Chalmers says, as the bank flags it will continue to ramp up interest rates to quell inflationary pressures.
“If we ask central banks to solve this problem on their own, then in [Stiglitz’s] words, we are asking for a ‘hard landing’,” he said.“Higher interest rates can’t stop war or grow more food, or produce more oil. They can’t fix a skills shortage, improve flatlining productivity or repair a broken energy market.”
The inflation rate, which was 5.1 per cent in March, is expected to be higher in figures to be released next week, and to step up again before the end of the year.“On the supply side, skill shortages, bottlenecks in supply chains and the certainty and affordability issues in the energy market – these sorts of issues are fuelling inflation too,” he said.
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