Here is the latest analysis from David Speers:
The result of annual inflation of 6.1% did not surprise anyone. Economists, the markets, the Treasury and the Reserve Bank were expecting a number roughly where it arrived. That doesn’t make it any easier to manage.
It will bring more interest rate hikes and, we’re told, the inflation problem will get worse before it gets better.
Since taking on the role of treasurer, Jim Chalmers has gradually lowered expectations of when workers can expect to see any improvement in their living standards. He has now acknowledged the obvious: there will be no real wage growth in the “short term”.
So when might we see some improvement? We should have a better idea today when Chalmers provides updated forecasts as part of his long-promised economic statement to parliament.
It will lower its forecast for economic growth by 0.5 percent for the last financial year, this year and the 2023-24 financial year, largely thanks to the global slowdown and the higher interest rates they were charged.
It is unclear what the new forecast will be for the arrival of hard-to-avoid real wage growth, but the Treasurer cautiously predicts it will happen “in this parliament” (a forecast Labor will desperately hope is accurate).
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