RBA official Sarah Hunter warns that the Middle East oil shock is fueling persistent domestic inflation, with rising energy costs now impacting supply chains beyond the fuel pump.
RBA Assistant Governor Sarah Hunter has indicated that the inflationary pressures stemming from the Middle East oil shock are not yet fully realized in the economy. As energy costs permeate beyond fuel into broader supply chains, including construction materials, the resulting sustained demand and cost-push inflation are expected to maintain upward pressure on global oil prices.
The RBA notes that higher energy costs are currently spreading from direct fuel prices into broader supply chains, such as construction materials, creating a lagged inflationary effect.
Reserve Bank of Australia Assistant Governor Sarah Hunter cautioned that the inflationary effects of the Middle East oil shock are far from over. Rising energy costs are now permeating beyond petrol prices, creating sustained upward pressure on construction materials and broader supply chains.
Beyond direct fuel costs, the oil shock is inflating the price of construction materials and other goods as higher energy costs permeate through global supply chains.