Australia’s Frydenberg: Full economic impact of bushfires remains uncertain

Comments by Australian treasurer, Josh Frydenberg

In the near-term, the bushfires are going to have a negative impact on the economy – businesses and consumption – and that is something that no doubt worries the RBA.

However, the central bank may have to be more tedious in gauging the longer-term impact of the bushfires. Inflation is expected to rise and housing/construction activity, employment is also a spot that is going to pick up strongly during the recovery period.

I reckon it still shouldn’t detract from the RBA leaning towards more easing this year but perhaps it may buy them enough of a buffer to not go with QE just yet.