Headline inflation forecast to peak lower than anticipated at 4.25%, treasurer says
On to inflation. The budget forecast that headline inflation would peak at 5% this year. As the war in the Middle East drags on, is that still the federal government’s assumption?
Chalmers says with additional progress than expected, it is now expected that inflation around the middle of the year will peak “more like four and a quarter rather than five”.
That is very, very welcome progress. It does show, I think, it does illustrate the progress that we’re making together in this fight against inflation. Now there’s still a lot of uncertainty in the Middle East and elsewhere. There’s still more inflation than we would like in our economy as a consequence, but we are making more progress than we anticipated.
Key to that, Chalmers concedes, is that ships will be able to pass through the Strait of Hormuz, that you’re confident, more ships will be able to pass through.
We desperately need the ceasefire to stick. You know, we can’t have another false dawn when it comes to the Middle East, and particularly the Strait of Hormuz. There’ve been some really welcome developments on this front, and we’ve seen the oil price come down quite substantially as a consequence. It wasn’t that long ago that a barrel of oil was in the 120s. This morning when I looked, it was in the low ‘70s. So that’s welcome progress. There’s inflationary pressures elsewhere in the economy still as well. But if you look at the progress we made on inflation during the week, the welcome developments in the Middle East, and a number of other factors. What we actually saw through the course of the last week is that the market expectations for an interest rate hike actually went substantially down.
We desperately need the ceasefire to stick. You know, we can’t have another false dawn when it comes to the Middle East, and particularly the Strait of Hormuz.
There’ve been some really welcome developments on this front, and we’ve seen the oil price come down quite substantially as a consequence. It wasn’t that long ago that a barrel of oil was in the 120s. This morning when I looked, it was in the low ‘70s. So that’s welcome progress.
There’s inflationary pressures elsewhere in the economy still as well. But if you look at the progress we made on inflation during the week, the welcome developments in the Middle East, and a number of other factors. What we actually saw through the course of the last week is that the market expectations for an interest rate hike actually went substantially down.
