This is a very complex question and there are always many varied views The key stats currently that the ABS have put out for the June Quarter recently are:
- The Australian economy rose 0.9% in seasonally adjusted chain volume measures
- GDP rose 3.9% in 2021-22
- The terms of trade rose 4.6%
- Household saving ratio decreased to 8.7% from 11.1%
According to the Australian Reserve Bank: “The Reserve Bank conducts monetary policy to achieve its goals of price stability, full employment, and the economic prosperity and welfare of the Australian people. It does this by targeting inflation between 2-3%, on average, over time.” This year has meant they have had to raise official interest rates to attempt to curve the steep inflation rise.
We have seen in recent months though a lot of price rises and inflation, more than for many years. How does inflation effect our economy and lives in general? This is a complex question. Some effects can be that businesses put up prices, which means goods and services begin to cost more, then employees want better pay. Often this can mean that wages rise to meet this demand which can in turn then put prices up further. This obviously effects household saving, and often means less spending beyond necessities which mans that business that rely on non discretionary or superfluous/ spending on extras.
By Peter Munro
Chief Writer for mysurvey.quest/ions
