Treasury forecasts inflation to peak at 7.75 per cent as real wages stall – صحيفة الصوت

Currently, Australia’s annual rate of inflation is 6.1 per cent for the June quarter.

Chalmers said Treasury expects inflation to track towards 5.5 per cent by the middle of 2023, falling to 3.5 per cent by the end of 2023 and staying there until the end of 2024.

The Treasurer told members of parliament that while Australia’s economic performance is good on a global scale, it provides little relief for residents who are doing it tough.

“Once again Australia is outperforming much of the world but that doesn’t make it any easier to pay bills at home,” he said.

“More Australians are in jobs than ever before and that is a very welcome outcome but fewer Australians are feeling confident about the choppy waters our economy is in.

“Every extra dollar Australians have to find to service the mortgage is a dollar that can’t help meet the high costs of other essentials.”

He described Australia’s economic landscape of record-low unemployment and soaring inflation as a “once-in-a-generation” challenge.

“The economic picture I have set up today represents a convergence of challenges, the kind of which comes around once in a generation,” he said.

“This a generational challenge that represents a once-in-a-generation opportunity for our country as well.”

He said real wages – wage growth minus inflation – won’t start growing again until 2023 or 2024.

“The harsh truth is that households would feel the benefits of higher wages while inflation eats up these wage increases and then some. Real wages growth relies on moderating inflation and getting wages moving again,” he said.

Real wages have already fallen by 4 per cent since June 2020 as inflation rapidly outstretched wage growth.

The Treasurer’s comments come after Australian senator Jacqui Lambie issued an ominous warning for households, saying she believes the nation is heading into a recession.

Speaking to Today this morning, Lambie said a roast lamb had now become a luxury for Australian families and she believed the economic writing was on the wall.

“People are cutting down on their fuel, doing what they can, carpooling and doing all that sort of stuff,” she said.

“I hate to say this, and I don’t want to say it, but I think let’s be honest here, we’re heading into recession.

“It’s just what that recession is going to look like, and how bad it is.”

In economic terms, a recession is defined as two consecutive quarters in which a nation’s GDP falls.