Data published Monday by Australia’s Roy Morgan from their survey for October 2021.
- expected inflation 4.8% annually over the next two years
This is up 0.3% points, and the highest Inflation Expectations for seven years) since November 2014)
- 1.3% points higher than a year ago in October 2020
- up 5 months in a row
Roy Morgan cite:
- increased demand driven not only by the emergence from COVID-19 restrictions but also the ability to spend the savings built up during the pandemic
- Federal Government pumped hundreds of billions of dollars of stimulus money into the economy
- barriers to people spending this money are finally being removed in Australia, and in other countries around the world, and this is driving a surge in spending, and demand
- surge in demand is running up against supply constraints from exporting countries such as China and this pressure is stressing the supply chain and forcing prices to increase
- Another factor at play is the impact the early stages of the pandemic had on investment in energy infrastructure. The lack of investment in oil and gas exploration and development during 2020 when the global economy ‘crashed’ is having a continuing impact now as energy shortages
A reasonable bunch of points indeed. The RBA is watching for wage increases to drive inflation higher. The next set of wages data from Australia is due on November 17.
This article was originally published by Forexlive.com. Read the original article here.