Higher global energy prices can help our export earnings, but they could also put upward pressure on electricity prices in Australia, adding to inflationary pressures. We have built a large increase in electricity prices into our central scenario but there is a risk we haven’t incorporated enough.
On the other side of the coin, however, global supply chain pressures are easing quite quickly and that could turn out to be more of a dampening force than we are currently expecting. Conclusion The Australian economy has come out of the pandemic in a strong position but inflation is too high.