RBA Says Australia Can Avoid Recession Even if Oil Prices Surge, Despite 4.35% Rates
Updated
Updated · Nine · Jun 5
RBA Says Australia Can Avoid Recession Even if Oil Prices Surge, Despite 4.35% Rates
3 articles · Updated · Nine · Jun 5
Summary
Michele Bullock told a Senate hearing Australia is still likely to post modest growth even under a prolonged Middle East war scenario that sends oil prices sharply higher.
Three rate hikes this year are already showing signs of working, Bullock said, though the full effect of tighter policy will take one to two years to flow through the economy.
Persistent inflation, slowing GDP growth, rising unemployment and higher borrowing costs have fueled recession fears, with an April Oxford Economics report warning of a sharp downturn under a prolonged Iran war.
Bullock pointed to investment as a bright spot, citing structural support from software, data centres and renewable energy, while Treasurer Jim Chalmers said Australia still has sturdier foundations than many advanced economies.