Part 3/8:
A significant theme emerging from the discussions surrounding Australia’s economic condition is the slowing down of demand. Recent indicators point to a weakening demand, compounded by persistent issues on the supply side of the economy. Productivity has been regressing, and last week’s GDP figures reflected that downward trend.
To effectively combat inflation, a crucial balancing act must be performed: either decreasing demand or increasing supply. While some success has been found in tempering demand, the lackluster state of the supply chain continues to present challenges, resulting in sticky inflation that remains a thorn in the side of the RBA.