Middle East Conflict Drives Inflation Risks for Australian Economy

The ongoing conflict in the Middle East has had a significant impact on Australia's economy, according to Reserve Bank of Australia (RBA) Governor Michele Bullock. In a parliamentary hearing, she stated that the conflict has made Australians poorer and is driving upside risks to inflation.

Bullock attributed the increase in oil prices due to the conflict as one of the main contributors to inflation. She said that these supply shocks have worsened the trade-off between inflation and employment.

The RBA's Monetary Policy Board, which Bullock chairs, will meet next at the end of September to consider interest rates. The board has kept the key interest rate on hold at 4.35 percent since its last meeting in August.