Financial worries are exceptionally severe right now due to increasing inflation, soaring interest rate, and escalating tax obligations.
As the expense of living keeps getting higher throughout this year, many people are not optimistic that their financial situation will get better in the coming year.
According to the Ipsos Global Inflation Monitor report released on a monthly basis, it is expected that inflation, interest rates, unemployment, and taxes will all increase in the next year 2023.
The most recent data from the Australian Bureau of Statistics (ABS) indicates that household expenditures increased at a slower rate in October 2022. In light of the possibility that inflation could start to decrease, could this be an indication that interest rates may stop increasing?
According to the ABS Monthly Household Spending Indicator for October 2022, expenditures had risen by 20.7% from October 2021. This marks the 20th consecutive month of sustained growth in overall spending.
Jacqui Vitas, the lead of macroeconomic data at the ABS, shared that:
“The increase over the course of the year was not as steep as it was in past months, which is likely due to the reduced effects of the COVID-19 Delta lockdowns compared to this time last year. Expenditures in the area of transportation rose by 42%, hospitality venues such as cafes and restaurants by 39.8%, and clothing and footwear by 32.1%. all of which demonstrated a notable growth, though at a slower rate than over the past two months.”
Indications That The Rate Of Inflation May Be Decreasing
Immediately after the Australian Bureau of Statistics (ABS) published the monthly Consumer Price Index (CPI) data, which pointed to Australia’s inflation rate, there were indications of controlled home expenditure. The numbers decreased slightly from the prior month when the increase was 7.3%, coming in at 6.9% this time.
If the rate of inflation begins to decrease, this could be an indication to the Reserve Bank of Australia (RBA) that their eight consecutive increases to the national cash rate in 2022 were successful in reducing spending. This could possibly lead the RBA to hold off on increasing the cash rate in 2023 and even prompt them to contemplate decreasing the cash rate at some point in 2024.
It’s essential to note that although the monthly inflation rate has decreased, it is still quite high – more than twice the target interval established by the Reserve Bank of Australia (RBA), which is between 2% and 3%.
The Australian Bureau of Statistics (ABS) will not be publishing the quarterly Consumer Price Index (CPI) results until the end of January 2023. The Reserve Bank of Australia is predicting that inflation could reach a maximum of 8% by the December quarter of 2022, before slowly decreasing over the next two years, with a level of just above 3% by 2024.