Chalmers Blames Middle East War for Australia’s Inflation

Treasurer Jim Chalmers has come to the defense of the federal government’s handling of inflation, just ahead of the Reserve Bank of Australia’s (RBA) decision to raise interest rates by 0.25%. Speaking at a press conference with Finance Minister Katy Gallagher, Chalmers argued that the conflict in the Middle East, rather than government spending, was the primary driver of inflation in Australia.

Chalmers also claimed that other nations were facing far more severe economic challenges than Australia. The RBA’s rate hike, announced on Tuesday, underscores ongoing concerns about inflation, which the government attributes to external factors beyond its control.

The full details of Chalmers’ defense and the broader economic context are available to subscribers of MacroBusiness. The article was written by Leith van Onselen, Chief Economist at the MB Fund and MB Super, who has a background in roles at the Australian Treasury, Victorian Treasury, and Goldman Sachs.