Rising unemployment, stubbornly high inflation and a looming interest rate hike are piling misery onto Australian consumers, but Labor insists better days are on the horizon. This was reported by Qazaqyia.kz citing The Guardian.
The pinch of optimism comes as mortgage holders brace for the Reserve Bank of Australia to lift the official interest rate to a near-15-year high of 4.6% on Tuesday, an outcome money markets are treating as largely a foregone conclusion.
Central bankers in the US, Japan and Europe have all pushed interest rates up since the RBA's board met in August, all crediting their decisions to rising oil and fuel prices resulting from the increasingly intractable US-Iran war.
On Sunday the deputy prime minister, Richard Marles, said the government knew households were "doing it tough" and was working to put downward pressure on inflation.
Average fuel prices in Australia's five largest cities had risen to $2.37 per litre for petrol and $2.69 for diesel as of Wednesday, but Labor has rejected calls for it to reinstate a previous cut to fuel taxes to help ease the burden on road-users.
Inflation, which came in hotter than expected in August, could rise from 3.5 to 4% when the Australian Bureau of Statistics publishes its latest figures on Wednesday.
Thus, the country's economy is under pressure from several directions: rising unemployment, high inflation and the threat of an interest rate hike. The Reserve Bank's decision will be significant for mortgage holders, as a rate hike to 4.6% will make loan repayments more expensive.
Although the government says it is taking measures to curb inflation, its refusal to reinstate the fuel tax cut could provoke discontent among road-users. Rising fuel prices affect overall consumer prices, intensifying inflationary pressure.
Although the situation is difficult for Australians, Labor is confident that better days are near. However, markets and most economists consider a rate hike inevitable, indicating there is no basis to expect relief soon.
The fact that central banks cite rising oil and fuel prices due to the US-Iran war shows that international factors are directly affecting the Australian economy. If this geopolitical tension escalates further, price pressure could also increase.
Data from the Australian Bureau of Statistics to be published on Wednesday is likely to show inflation rising from 3.5% to 4%. This could also influence the Reserve Bank's decision, since controlling inflation is the central bank's primary task.
Overall, the Australian economy is going through a difficult period. Rising unemployment, high inflation and a rate hike will significantly affect consumers' financial situation. Despite the government's optimistic statements, markets and economists do not expect significant improvement in the near future.