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Inflation in Australia rose to 7.3 percent in this year’s third quarter, its fastest clip since the same period in 1990, which at the time caused the country’s central bank to raise interest rates so high that the economy lurched into recession.
The price of furniture was up 6.6 percent and natural gas 10.9 percent.
Housing costs gained 3.7 percent, due to labor and materials shortages, according to the Australian Bureau of Statistics.
Core inflation, devoid of food and fuel costs, traveled at 6.1 percent, the strongest since at least 2003 and beating analysts’ forecast of 5.5 percent.
Inflation will rise to just below 8 percent this quarter, the Royal Bank of Australia estimates.
Food prices will rise due to extensive flooding in the country’s eastern farmlands, supermarket giant Coles Group noted.
TREND FORECAST: The central bank has raised its key interest rate several times, setting it currently at 2.6 percent. While analysts expect another two quarter-point moves this year, which would peg the rate at 3.1 percent, considering the inflation rate, interest rates are still in negative territory. And with the global economy slowing down and inflation rising, Australia too will join the Dragflation nations: Declining GDP, rising inflation.