ziki said:
well as you can see im in year 9... so im very confused by the two arguments, can someone tell me whose right???
but i still think that its gonna drop
Essentially the 5% figure is from a few months ago; today many world economies have slipped into recession, and consumer confidence and spending in Australia is dropping. As prices are very basically determined by supply and demand, falling demand equals lower inflation. Hence, the inflation figure today is dropping.
sthcross.dude said:
The economy hadn't had a chance to respond to the recent absurd rate cuts when those figures were published.
We won't be able to find anything meaningful about the latest slashes for at least several months.
I predict dangerously high inflation. The RBA will be forced to raise interest rates significantly and we will go further into this inevitable recession.
If we go into recession, I very much doubt inflation will be a huge issue...There is already evidence consumer confidence and spending is down (why do you think the Christmas sales have started early?), which indicates a softening of demand, which will result in some degree of disinflation. Combined with many developed economies already slipping into recession, the RBA is right to largely ignore inflation at present.