Chief Economist of AMP Shane Oliver claims that the record numbers of Australian immigrants are too high and causing inflation. AMP refers to The Australian Mutual Provident Society formed in 1849 as a non-profit life insurance company and mutual society.
Mr. Shane says immigration levels in Australia have reached an all-time high which is increasing economic expenses.
According to Shane, a record number of migrants entering Australia is essentially the reason inflation has remained so high. It may force the Reserve Bank to raise interest rates again.
Mr.Shane said retail sales are down to where they were a year ago. We are experiencing a historic population increase as a result of record immigration numbers. And, of course, this keeps demand higher than it would otherwise be.
He added even if individuals are struggling overall, there is still demand from the high population growth. This affects service demand which ultimately affects service inflation.
Furthermore, he said it is true we needed more immigrants to come in and fill some of those labor shortages we faced during the pandemic. But he believes that Australia has gone from “undersupply” to “oversupply”.
Overseas immigration reached an estimated 500,000 over the past 12 months to September with population growth of roughly 2.5%. It is the fastest-growing rate since the early 1950s.
Australian Bureau of Statistics figures revealed a higher-than-expected inflation rate of 1.2% in the last quarter compared to a 0.8% increase in the previous period.
Experts believe the Reserve Bank will almost certainly increase interest rates at its next meeting on Tuesday in order to combat inflation.
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