Trump's inflation impact on Australia could be in either direction, says RBA's Hauser
Reserve Bank deputy governor Andrew Hauser has indicated that the upcoming global upheaval is a crucial focus but the outcome remains murky.
Reserve Bank deputy governor Andrew Hauser has sought to soothe nerves about the implications of tariffs from the incoming Trump administration but has warned the central bank will remain vigilant about any impact on inflation.
Speaking at an Australian Business Economists event a day after the RBA board kept rates on hold for its final meeting in 2024, Hauser focused his commentary on the new trading regime and the myriad possibilities for Australia and local inflation.
He described a raft of scenarios but steered away from some of the more alarmist concerns about an impending trade war delivering a historic blow to the Australian economy and instead suggested that tariffs could even increase activity. Though he admitted that was maybe “not … the most likely outcome”.
It’s a more probable scenario that “Australian activity is likely to take a hit”. But the magnitude of this would be less akin to the 10% slump in GDP seen during the Great Depression and closer to 0.2 percentage points over the subsequent two years, he said. New research published on Wednesday by the central bank indicates that Australia is relatively resilient to global shocks.
