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According to Sarah Hunter, assistant governor of the Reserve Bank of Australia, the RBA anticipates that inflation will rise more than previously anticipated due to rising oil prices brought on by the Middle East crisis.
Hunter clarified in a speech and interview that the RBA is concentrating on three factors: the risk of growing inflation expectations, the economy’s solid beginning position, and the direct and indirect effects of oil prices.
According to the RBA’s most recent projections, the conflict will shortly end and oil prices would return to about US$82 per barrel in the second half of 2026.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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