Last week, the Bureau of Statistics released its economic growth data for the March quarter.
It showed the economy grew 0.8% in the first three months of this year and 3.3% annually, beating analysts’ forecasts.
Federal Treasurer Jim Chalmers said there were “pleasant elements” to the numbers as strong demand was supported by a tight labor market.
However, he warned, the headlines mask a disturbing reality.
“National accounts are notoriously backward-looking,” said the treasurer.
“If you think about what’s happened in our economy since the end of March: inflation is higher, we’ve had interest rates rise, gasoline prices are up 12% since the at the end of April, wholesale electricity prices rose by 237% since the end of March, gas is more than 300% higher than the average for the past two years.
“We have labor shortages. We still have COVID absenteeism. And the international environment has also become more difficult.
“There is no point in mincing words about the kinds of conditions we inherited,” he warned.
These economic conditions are serious, and they are compounded by uncertainty.
Take a look at the minutes of the Reserve Bank’s May board meeting, where its members agreed to lift the cash rate target amid the federal election campaign.
The minutes include the word “risk” six times, variations of the word “uncertain” nine times and “inflation” 39 times.