Australia & New Zealand

Soaring food and energy prices to keep inflation high

The spike in rural commodity prices should spill over into higher food inflation before long. And while the impact of higher energy commodity prices is less clear cut, we think electricity inflation is also set to rise. That’s why we think headline inflation is set to ease less sharply than the RBA anticipates next year. Amid early signs that soaring consumer prices will result in stronger wage growth, we expect the RBA to hike rates in early 2023.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
Continue reading

More from Australia & New Zealand

Australia & New Zealand Data Response

Australia International Trade (Oct. 2021)

While it’s early days, the October trade figures suggest that net trade will turn into a drag on GDP growth yet again as imports rebound after the end of lockdowns.

2 December 2021

Australia & New Zealand Data Response

Australia CoreLogic House Prices (Nov.)

Housing demand remains very strong, but rising interest rates and lending restrictions should result in a further slowdown in house price growth next year.

1 December 2021

Australia & New Zealand Data Response

Australia GDP (Q3 2021)

With private consumption now rebounding strongly as lockdowns have ended, output in states not affected by lockdowns continuing to rise, and capital spending resilient, we expect GDP to surpass its pre-Delta peak this quarter already and to keep surprising to the upside next year.

1 December 2021

More from Marcel Thieliant

Japan Economics Weekly

Supply shortages set to hold back manufacturers

Production of motor vehicles and electronics fell sharply in August and is well below pre-pandemic levels. This isn’t mainly due to weaker demand, which has moderated but remains healthy. Instead, it seems to be driven by mounting material shortages. Those shortages will probably persist for a while yet, posing a downside risk to our upbeat forecasts for 2022 GDP growth.

1 October 2021

Japan Data Response

Tankan (Q3 2021)

The latest Tankan survey was stronger than most had anticipated, supporting our view that the economy will recover rapidly as the Delta wave has ebbed. However, there are mounting signs that the recovery in the manufacturing sector will be hampered by supply shortages.

1 October 2021

RBA Watch

RBA set to hike in 2023

With the latest lockdowns set to end next month, we expect the RBA to taper its bond purchases in February. We still expect wage growth to accelerate more rapidly than the Bank anticipates and stick to our forecast for the first rate hike in early-2023.

28 September 2021
↑ Back to top