Like the rest of Australia I’m devastated by the recent floods in Queensland. The vision coming through the TV and the articles I’ve read in the newspaper is something I would expect to see in a third world country; not four hours away on the other side of Australia.
The clean up costs will be enormous. Early estimates put the bill at $1.3 billion dollars. Of course, this will push up inflation and put pressure on the RBA to raise interest rates.
But some economists are predicting the RBA will keep rates on hold for up to 12 months; and this should see provide positive sentiment in the housing market and stimulate growth in 2011.
I am not an economist but I believe it would be un-Australian for the RBA to put any undue pressure on the thousands of families already doing it tough.