UBS Economists: Middle East Conflict May Prompt Australian Rate Hikes

UBS economists have indicated that even if the Middle East conflict is resolved swiftly, its impact on Australian inflation, including secondary effects, will be immediate and significant. According to Jin10, this situation could pave the way for interest rate hikes by the Reserve Bank of Australia (RBA) in May and August. The negative impact on actual economic growth is expected to be more prolonged, potentially affecting the coming months or even quarters. With the overall inflation rate for the first quarter likely exceeding 4.8% year-on-year, the RBA's meetings in May and August remain the most probable occasions for rate increases.