Australian Treasurer Jim Chalmers has cautioned that consumer prices may increase in the aftermath of Cyclone Alfred, which caused widespread destruction to crops and homes. Preliminary government assessments indicate a substantial immediate impact on the nation’s gross domestic product (GDP), potentially reaching $1.2 billion. This could translate to a reduction of approximately one-quarter of a percentage point in quarterly economic growth, according to excerpts from a speech Chalmers is scheduled to deliver.
Chalmers emphasized the ongoing efforts to fully assess the economic consequences of the disaster, stating, “We are still getting a handle on the economic fallout, but it will be substantial.” He further highlighted the potential for upward pressure on inflation, citing factors such as increased building costs and the damage to crops, which could lead to higher prices for essential food items like fruits and vegetables. The cyclone’s impact underscores the vulnerability of the Australian economy to extreme weather events and the potential for such events to exacerbate inflationary pressures.
