Australia’s Central Bank Warns Inflation Is Still Too High Despite Recent Slowdown

Post by : Saif

Australia’s central bank has made it clear that inflation is still too high, even though recent data shows a slight slowdown in price increases. The warning came from Reserve Bank of Australia Deputy Governor Andrew Hauser, who said the latest inflation figures were helpful but not enough to ease concerns.

Official data released this week showed that consumer price inflation fell to 3.4% in November, down from 3.8% in October. While this drop was welcomed, Hauser said it was largely expected and does not yet bring inflation back to a comfortable level.

The Reserve Bank of Australia aims to keep inflation between 2% and 3% over the long term, with a preferred midpoint of 2.5%. At the moment, inflation is still above this target range. Hauser stressed that inflation above 3% remains a problem for households and the wider economy.

Core inflation, which removes sharp price changes and gives a clearer picture of long-term trends, was recorded at 3.2% in November, only slightly lower than the previous month. This shows that price pressures are easing slowly, not sharply.

Earlier, rising inflation during the third quarter had led the central bank to warn that interest rates could increase if prices did not cool. Australia’s current interest rate stands at 3.6%, and any further rise could make loans more expensive for families and businesses.

Hauser said the central bank will closely study inflation data for the entire fourth quarter, which will be released later this month. However, he also made it clear that decisions will not be based on one report alone. The bank will consider the overall health of the economy, including jobs, spending, and growth.

For Australian households, this means cost-of-living pressures may continue for some time. While inflation is moving in the right direction, the central bank wants stronger and more consistent signs before changing its policy stance.

In short, Australia’s central bank believes progress is being made, but the fight against inflation is not over yet. Careful decisions in the coming months will be key to keeping prices under control without harming economic growth.

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