Australia Economy Resilient as Oil Shocks Hit Confidence: RBA Hunter

2026-07-08 01:34 By Farida Husna 1 min. read

Australia’s consumer and business confidence has weakened following the recent oil price shock, though economic activity shows little sign of slowing, Reserve Bank of Australia Assistant Governor Sarah Hunter said in a speech on Wednesday.

Addressing supply shocks, she cautioned that central banks cannot always “look through” such disruptions, warning that if inflation expectations rise, restoring stability may require “some period of low inflation and higher unemployment.” Hunter stressed that while supply shocks pose difficult trade-offs, they do not diminish the importance of maintaining low and stable inflation.

She added the board “will continue to act as needed to ensure inflation returns to target and the labour market to sustainable full employment.” The RBA has raised its cash rate three times this year to 4.35% in response to the global energy shock triggered by the Iran war.

Policymakers left rates unchanged in June but reiterated that further tightening remains possible.



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Australia Economy Resilient as Oil Shocks Hit Confidence: RBA Hunter
Australia’s consumer and business confidence has weakened following the recent oil price shock, though economic activity shows little sign of slowing, Reserve Bank of Australia Assistant Governor Sarah Hunter said in a speech on Wednesday. Addressing supply shocks, she cautioned that central banks cannot always “look through” such disruptions, warning that if inflation expectations rise, restoring stability may require “some period of low inflation and higher unemployment.” Hunter stressed that while supply shocks pose difficult trade-offs, they do not diminish the importance of maintaining low and stable inflation. She added the board “will continue to act as needed to ensure inflation returns to target and the labour market to sustainable full employment.” The RBA has raised its cash rate three times this year to 4.35% in response to the global energy shock triggered by the Iran war. Policymakers left rates unchanged in June but reiterated that further tightening remains possible.
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