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War Could Push Inflation Past 5 per Cent, Hurt Nation for Years: Chalmers
Treasurer Jim Chalmers warns inflation could exceed 5% due to Middle East conflict-driven commodity price rises, with GDP projected 0.6% lower by 2027, Treasury says.
- On Tuesday, the Reserve Bank of Australia raised the cash rate by a quarter to 4.1 per cent, with the nine-person monetary policy board splitting five to four on the decision.
- Inflation picked up materially in the second half of 2025, and crude oil prices surged above $US100 a barrel after Middle East conflict, moving the expected rate rise forward from May to March.
- Australian borrowers face immediate cost pressures, with the hike adding $120 monthly to repayments on an average new $736,000 mortgage and about $73 on the average outstanding $460,000 mortgage.
- Governor Michele Bullock warned the bank may accept a recession to control inflation, while ANZ economist Sophia Angala noted consumer confidence has plunged to 68.5pts, its lowest since March 2020.
- The RBA led eight major advanced-economy central banks meeting this week by hiking, and major banks including ANZ expect a follow-up increase in May that could lift the cash rate to 4.35 per cent.
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Sydney Morning Herald+2 Reposted by 2 other sources
War could push inflation past 5 per cent, hurt nation for years: Chalmers
The treasurer has released modelling showing the economy could shrink and inflation could scar the nation for years if the war in Iran does not end soon.
·Sydney, Australia
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Treasurer Downplays Recession Fears After RBA Warns of Downturn Risk
Australian Treasurer Jim Chalmers has moved to calm fears of a looming recession after the Reserve Bank of Australia (RBA) earmarked the possibility after raising interest rates a second time. The central bank on March 17 lifted the cash rate to 4.1 percent with blame placed on disrupted global energy prices linked to the Iran conflict. RBA Governor Michelle Bullock warned that Australia may have to confront the possibility of a recession if inf…
·New York, United States
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Coverage Details
Total News Sources28
Leaning Left15Leaning Right7Center2Last UpdatedBias Distribution63% Left
Bias Distribution
- 63% of the sources lean Left
63% Left
L 63%
R 29%
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