Don’t forget about fiscal policy to manage inflation risks

With all the focus on monetary policy and the upcoming hiking cycle by the RBA, the role of fiscal policy can’t be forgotten as a way to manage inflation risks. In this podcast Stephen Halmarick, Chief Economist talks with Belinda Allen, Senior Economist about how the better economic outlook, both through nominal GDP and commodity prices suggests the actual budget deficit for 2022/23 could be considerably improved. It will be important that fiscal policy is allowed to tighten via the automatic stabilisers and this will help limit the need for higher interest rates and help contain the risks from higher inflation.

 

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