As the Reserve Bank of Australia (RBA) holds its meeting, New South Wales (NSW) Premier Chris Minns has warned of the risk of 'stopping the economy dead'. This was reported by Qazaqyia.kz citing The Guardian.
Minns rejected commentary from some economists that the RBA's decision would be straightforward. 'I know they've got a just difficult decision to make. I accept that, but we've got to be careful that in their efforts to slow down the economy, they don't stop it dead,' he said.
According to the premier, this is an extra hit to a pay packet that many people haven't budgeted for and are not ready for. 'It's going to have a massive impact on our economy,' he added.
Minns said a rate hike would have a 'disproportionate impact' on the state's economy due to NSW's high house prices.
His comments came on the day of the RBA meeting as market participants await the cash rate decision. The premier's warning reflects the debate over the balance between slowing economic growth and controlling inflation.
It should be noted that the RBA's decision has not yet been announced, and Minns's statement was made amid uncertainty ahead of the meeting. He highlighted the potential impact on the economy and expressed concern about the consequences of a rate hike.
This statement may resonate particularly amid Australia's post-pandemic economic recovery, as debates over the housing market and consumer spending continue. According to the NSW premier, any rate increase will have a significant impact on the financial situation of the population.
Thus, the outcome of the RBA meeting will be important not only for financial markets but also for the economy of Australia's largest state. The premier's warning calls on decision-makers to maintain a balance between slowing the economy and curbing inflation.