Rising inflation is Australia’s biggest challenge

SYDNEY: Australian Treasurer Jim Chalmers said the Australian Consumer Price Index rose 5.1 per cent in the first three months of the year. That situation put pressure on households and suggested further rate hikes.

Under these conditions, it is likely that he will raise his inflation forecast in Parliament in next month’s economic statement. “It’s really clear now that the inflation challenge facing Australia is worse. People have to anticipate that it’s going to be higher than it is now,” Chalmers said. business times, Thursday 9 June 2022.

Australia is vulnerable to rising electricity prices, which hit Europe and the US after Russia’s invasion of Ukraine and increased inflationary pressures. Australia’s central bank (RBA) in early May forecast inflation to reach six per cent by the end of the year, falling to three per cent by mid-2024.

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This was as a response to rising interest rates and higher energy costs through data. It aims to keep inflation in the range of 2-3 per cent over time. Undoubtedly, the explosion of inflation is a challenge for many countries of the world.

“It’s a defining challenge in the economy. It’s not easy to fix, it’s not easy to overcome. But a challenge, far more important than my predecessors,” he said.

Australia’s economy continues to grow and unemployment is at its lowest level in 48 years. But the budget is deep and government debt is at record levels after heavy fiscal spending to support the economy through the pandemic.



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