Reserve Bank governor Philip Lowe has warned that the 2022 Russo-Ukraine conflict might trigger a new wave of inflation, and as a result, interest rates are likely to rise.
This article by Gareth Hutchens, writing for ABC-Australia, makes the following points:
- The Russo-Ukraine war has sent commodity prices soaring.
- The war has sent prices soaring for critical commodities, such as crude oil and gas.
- Agricultural commodities have also been affected, with the price of wheat in global markets rising by 40% since Feb 2022.
- Australia could benefit as it is a significant exporter of all types of commodities.
- A rise in commodity prices means higher profits for Australian resource companies and higher tax revenue for the Government.
- Australians would, however, suffer from rising petrol and other prices.
- A rise in commodity prices is likely to be passed onto manufactured goods that Australia imports.
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