Australian Treasurer Chalmers: Inflation now forecast to peak at 7.75% in Q4

Dhwani Mehta FXStreet

Delivering a "confronting" economic statement to the nation on Thursday, Australia’s Treasurer Jim Chalmers said that inflation is now forecast to peak at 7.75% in the December quarter.

Additional takeaways

Headline inflation seen at 5.5% by middle of 2023, 3.5% by end of 2023, 2.75% by middle of 2024.

Final budget outcome for 2021-22 likely to show a dramatically better-than-expected outcome.

Unemployment rate expected to remain low before returning to 3.75% by June 2023 and 4% by June 2024.

Short, medium-and-longer-term pressures on the budget are more pronounced.

Upgrades forecast for nominal wages growth to 3.75% this financial year and next.

Real wages are expected to start growing again in 2023-24.

Expect that government payments will be around a$30 billion higher over the forward estimates.

Market reaction

At the time of writing, AUD/USD is trading modestly lower at 0.6989, unperturbed by the above comments from Chalmers.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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