Navigating the Flood of Inflation in a Thriving Economy

Must Read

As the global economy enters a period of soaring inflation, navigating the flood of rising prices can seem daunting.

“There is no one-size-fits-all approach to dealing with inflation,” says financial expert Richard Evans. “However, some key strategies can help you stay ahead of the curve and avoid being swept under by rising prices.”

The Consumer Price Index demonstrates how spending our money now gives us more value than in the past. While some worry that this trend will bring an end to economic growth, others argue that it is a sign of a thriving economy

The official rates in Australia have increased by 2.75% this year. Inflation-adjusted official interest rates are still negative, meaning that if you were to borrow money now and pay it back in a year, the value of the money would be worth less.

According to market pricing, there is a high probability that the next meeting in early December will result in a hike of over 3%. Although it’s not impossible, the RBA pausing is unlikely.

“There are many factors that come into play when deciding your approach to dealing with inflation,” says Evans. “Some strategies, like adjusting your spending or saving habits, may be more effective than others. Ultimately, the key is to stay mindful of the current economic climate and make decisions that will allow you to thrive in this period of rising prices.”

Just a few weeks ago, it was more likely than ever that the Reserve Bank would hike rates in December. But then new US inflation figures showed that inflation is softening from 8.2% to 7.7%. However, be cautious–that figure may not be accurate because it’s pulled down by lower used car prices (second-hand goods aren’t included in Australia’s CPI).

Our economic cycle is lagging a bit compared to the Americans. Inflation rose later, and as a result, the central bank reacted later. It’s a lot like how movie releases used to work— America would see the show first, and then we would get it six months later.

There’s no telling when CPI will drop in Australia–indeed, Treasury and the RBA still believe we are on an upswing and price growth has yet to peak.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img