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Australia's Economy Resilient to Oil Shocks
28 May
Summary
- Reserve Bank board member Carolyn Hewson commented on Australia's economy.
- Australia's economy is less vulnerable to oil shocks than in the 1970s.
- Hewson warned of potential 'second-round effects' on inflation expectations.
Australia's economy demonstrates a considerably stronger resilience to oil shocks than it did during the inflationary crises of the 1970s. Reserve Bank board member Carolyn Hewson emphasized this point, offering reassurance regarding the nation's current economic standing.
However, Hewson also issued a warning about potential "second-round effects." These risks could materialize if persistently higher fuel prices start to shape inflation expectations or influence wage negotiations. Such developments could indirectly contribute to broader economic instability.
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