RBA deputy governor Michele Bullock says outlook for global economy is ‘quite worrying’

The outlook for the global economy is “quite concerning” and will have implications for Australia, a Reserve Bank official has warned.

Deputy Governor Michele Bullock says there are mounting problems in the United States, Europe and China and things are “on a knife edge”.

The RBA still plans to raise interest rates further, she said, in part to convince Australians that high inflation isn’t about to take hold.

But there are a number of things that could go wrong in the global economy that would undermine the RBA’s attempt to safely navigate Australia through its rapid rate hike cycle, she said.

She has also explained how the RBA’s ability to create money has helped support Australia’s economy during the pandemic.

Many risks around the world

Ms. Bullock listed the main risks to the global economy.

She said China’s zero-COVID approach will continue to wreak havoc on global supply chains and Chinese demand.

The extensive problems with the real estate market in China were also of concern, as real estate accounts for a third of the country’s economy.

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