Bullock Warns of Sluggish Business Sector Amid Inflation Concerns

Reserve Bank of Australia Governor Michele Bullock has expressed her concerns about the nation's productivity growth, stating that Australian businesses have become less dynamic over the past decade. Speaking at a Committee for Economic Development of Australia event in Sydney on Tuesday, Bullock called on corporate leaders to 'step up to the plate' and contribute more to lifting the nation's productivity.

Bullock said managing inflation had been made more difficult by recent economic shocks, including tariff hikes, the Ukraine war, and conflict in the Middle East. She noted that inflationary risks flagged earlier by the RBA appeared to be 'materialising', especially the effects of elevated fuel prices sparked by the Middle East conflict.

The RBA Governor warned that an unemployment rate between 4.5 and 5 percent would probably be needed to ease inflationary pressures. Bullock also emphasized the role of business in assisting with productivity growth, stating that Australian businesses have become less dynamic over the past decade and are not investing enough or looking for ways to increase productivity.