Grim Oz warning on rates, inflation (The Mercury, Tasmania, Northern Territory News, Geelong Advertiser)

Description

Interviewed as an energy markets and fuel supply chain expert on the inflationary consequences of damage to Middle Eastern oil and gas infrastructure. Argued that headline inflation would exceed the major banks' forecasts, including Commonwealth Bank's projected 5.4 per cent peak, on the grounds that diesel costs would remain elevated for six to twelve months even with the Strait of Hormuz technically open, given the lag before crude reaches refineries. Assessed that excise relief would not prevent the shock propagating through transport and agriculture into consumer prices, that further RBA rate increases were plausible though of limited effect where demand is concentrated in necessities and wage growth is absent, and that Qatari projections for rebuilding LNG facilities within five years appeared optimistic — with consequences flowing through Japanese and Singaporean electricity costs into the price of the refined product Australia imports.

Subject

Inflation forecasting, diesel price persistence and the transmission of Middle East energy infrastructure damage to Australian consumer prices.