Treasurer Josh Frydenberg says the Reserve Bank’s interest rate decision should be made independently next Tuesday after his predecessor Peter Costello said the central bank was “out of touch” for failing to raise interest rates in time to deal with the shocking shocks. avoid inflation this week.
“As the current treasurer, I do not want to pre-empt or comment on the Reserve Bank’s actions,” Frydenberg told ABC this morning, saying the RBA would “make its own decision” on whether or not to raise rates during the period. election campaign.
Opposition spokesperson Dr. Jim Chalmers accused Frydenberg of “attempting to exert some political pressure” on the Reserve Bank not to raise cash rates at its meeting next Tuesday, saying that its independence “must be protected and cherished at all costs”.
Chalmers said the Reserve Bank should “make its decisions without political interference from current and former treasurers”
Data from the Australian Bureau of Statistics on Wednesday shows inflation has risen 5.1 percent in the past year — more than twice as fast as wage growth — after peaking at 2.1 percent in the first three months of 2017. the year.
Frydenberg said the Australian economy has “endured a remarkably strong recovery” and that high inflation was largely driven by international factors.
“The main drivers of the higher inflation rates we are seeing are housing costs, transportation costs and food costs. And we know from both the pandemic and what is happening in Ukraine now that we are seeing major supply chain disruptions,” Frydenberg said.
“We’re seeing higher shipping rates rise five to six to seven from what they were before the pandemic, and we’ve seen a spike in fuel prices.”
The treasurer said the country’s economy remained strong and real wages were expected to rise in a tight labor market, pointing to the low unemployment rate of 4 percent.
He praised the Reserve Bank for “laying a safety blanket over the economy” with its historically low emergency interest rate.