The Reserve Bank is at a critical point, economists say – it could let inflation remain a little higher for longer or risk tipping Australia into a recession.
The Reserve Bank risks tipping Australia into a recession if it makes a “knee-jerk” reaction to potentially higher-than-expected inflation at its August meeting, economists warn, as households continue to struggle with rising cost-of-living pressures.
The combination of high inflation and interest rates has virtually stalled economic growth: the economyof the year, taking annual growth to 1.1 per cent. Deloitte expects the economy to slow further, growing by 1 per cent through the whole of 2024. The RBA board and bank governor Michele Bullock have repeated their determination to bring inflation into the target 2-3 per cent band while keeping unemployment low.Inflation was 3.6 per cent in the year to March and is expected to rise slightly to 3.8 per cent in the year to June, while the labour market has remained strong with the unemployment rate, currently 4.1 per cent, well below pre-pandemic levels.“What is inflation at 3.
That economy has spent the past 18 months dipping in and out of a technical recession, and the unemployment rate in New Zealand has gone from being well below Australia’s rate to above – at 4.3 per cent. “The household and consumer side of the economy has been struggling for quite a while, buffeted by inflation, higher interest rates, and what’s driving these things? Things like higher mortgage repayments, soaring rents.”
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Reserve Bank risks recession with August rate riseThe Reserve Bank is at a critical point, economists say – it could let inflation remain a little higher for longer or risk tipping Australia into a recession.
Read more »
Interest rates: Reserve Bank of Australia forced into a humiliating hiking cycleIn a huge embarrassment for the central bank, its next move in interest rates should be higher, not lower.
Read more »
‘RBA to hike in August’, says investment bank as property market pushes on upAustralian property prices are expected to increase by as much as 5 per cent in calendar year 2024, according to the June PropTrack Property Market Outlook Report.
Read more »
'Nasty upside surprise' on inflation raises interest rate pressure on the Reserve BankA higher-than-expected inflation number has dramatically raised the risk that the Reserve Bank will be forced to hike interest rates again as early as August.
Read more »
The only certainty for your mortgage rate – Reserve Bank uncertaintyThe Reserve Bank is supposed to have a handle on how the economy will perform over the next two years. Its minutes show it doesn’t.
Read more »
The only certainty for your mortgage rate – Reserve Bank uncertaintyThe Reserve Bank is supposed to have a handle on how the economy will perform over the next two years. Its minutes show it doesn’t.
Read more »