These risks clearly cannot be ignored, although the recent more positive data have led to renewed focus on another risk – that is, a rise in global inflationary pressures, particularly as commodity prices have increased significantly over recent months.
As an illustration of this increase, the RBA’s own Index of Commodity Prices is at an all time high and has risen by almost 50 per cent over the past year (Graph 2). Graph 2  This upward pressure on commodity prices is occurring at a time when conventional measures of the global output gap remain quite large.