Finance Minister Jim Chalmers announced on Wednesday that the underlying inflation rate has decreased. This brings hope to families that the Reserve Bank of Australia may choose not to raise interest rates next week.

The data released by the Australian Bureau of Statistics on Wednesday showed that the inflation rate in the second quarter of 2024 only increased by 1%, while the Federal Reserve's preferred measure - trimmed mean inflation - fell from 4% to 3.9%. These data are roughly consistent with economists' expectations, leading some to believe that there is no clear signal for the Reserve Bank of Australia to decide to raise interest rates at its meeting on August 6th. Although satisfied with Wednesday's data, Chalmers acknowledges that the Labour government faces challenges in its efforts to lower inflation rates.

He pointed out that the inflation rate in our economy is very sticky and stubborn, and then promoted the measures taken by the government. When we took office, the inflation rate was over 6%, but now it has dropped to around 3%. We have seen a decline in the underlying inflation rate for six consecutive quarters, which is also an important development

Jim Chalmers (Image source: SkyNews)