Australia's Growth & Inflation: Bank's Tightrope Walk

0:00The Reserve Bank is signaling more interest rate hikes, even with the war in Iran causing short-term economic pain. A fresh OECD report predicts Australia will be one of the world's fastest-growing economies this year and next, but with some of the highest inflation, rates among rich nations. Earlier this week, the OECD downgraded global growth forecasts due to the conflict, while boosting Australia's outlook, expect 2.3% growth this year, and 2.4% in 2027. Outpacing the United States at 2%, the United Kingdom at 0.7%, and others like Canada and Germany. Meanwhile, inflation here is set to hit 4.1% this year, second only to the US at 4.2% before easing to 2.5% in 2027. Reserve bank officials' worry consumers might lock in expectations for rising prices, making inflation stickier. Treasury models show higher oil prices can push inflation near 5% by mid-year if crude stays

1:03around $100 US dollars a barrel, clipping growth slightly before a rebound. The OECD warned central banks must stay alert to energy shocks, possibly adjusting rates up for inflation or down if growth weakens badly. The government faces calls for targeted relief like petrol tax cuts or free transit, but experts urge short-term aid only for the neediest to avoid. Fueling price pressures. As the bank monitors these risks, the focus stays on taming inflation for steady growth ahead. Sydney News Today, powered by AI bringing you what matters. I'm Corey with the story.