Markets turmoil and interest rate rises: the economic challenges facing Australia after the election

Economists predict the Reserve Bank of Australia will raise the cash rate at least four more times in 2022 alone. Photograph: Dan Himbrechts/AAP

At the end of last year, many signs pointed to Australia’s economy reaching a post-Covid sweet spot right about now, in the middle of the election campaign. Even Reserve Bank governor Philip Lowe was confident 2022 would be rate-rise free.

But that was before most central banks – including Australia’s – underestimated the strength of demand coming out of the pandemic and resulting plunge in joblessness, Russia’s February invasion of Ukraine and energy and food prices soaring.