8 Sep 2022
Australian Interest Rates: Agricultural Boom
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The RBA (Reserve Bank of Australia) increased interest rates.
Why do interest rates keep rising, because the Australian economy is doing well.
The unemployment rate has collapsed to 3.4% and the ABS (Australian Bureau of Statistics) has lifted annual real GDP (Gross Domestic Product) growth from 3.3% to 3.6%.
It is not just hard commodities such as iron ore, coal and gas that are in high demand globally but also Australian soft commodities.
In fact it is an agricultural boom.
Click for chart.
This means that the RBA will continue to increase the Cash Rate and that means that residential mortgage interest rates will continue to rise but there will be a limit because the Federal Government cannot afford to financially bankrupt the 30% of Australian households who hold residential mortgages.
Now is the time to remain invested according to your appetite for volatility and continue to buy more quality assets at discounted prices.
If you have family, friends or colleagues that want financial advice please ask them to contact us and we will work out how best to help.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.