Wealthi's Co-founders Domenic Nesci & Peter Esho discuss a range of themes in regards to inflation rising in Australia. Dom & Pete shares an overview of the global factors causing prices to soar, fears of hyperinflation, and the future trends happening in the market that will directly impact the Australian markets.
Watch the full episode to learn whether Australia will sustain its growth or head into a high inflationary environment.
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Episode transcript highlights
Peter Esho: (03:08)
No, I don't think so. Stagflation gets thrown around a lot, but basically what's happening is we've got inflation now, but we've also got growth. It's inflation with growth and there's a lot of pent-up demand after the lockdowns.
And Australia's just a great place, a great, great economy to be investing in, to be working in, to be building a business in. And stagflation is when the price of things goes up, but you don't have growth and you don't have a solid economy.
It's just prices going up. We don't have that at the moment. And I think what we'll see next year Dom is a lot of the inflation charts come out of the market a little bit. I think inflation will moderate. We do have really low rates. Really, really ultra-low rates and so you have to expect inflation, but next year will be more of a year of adjustment and the year after.
Domenic Nesci: (04:15)
And it's interesting because people are talking about inflation and there are a number of key things that are causing it. It's obviously low rates, the halts, it's been very difficult for things to get in and out of countries as well, so logistically it's been tougher for things to move around.
That's gotten more expensive for building materials, for supplies of electronics, cars, everything, it's gone up. Now we're going to see wage growth is what a lot of people are talking about because 2 to 300,000 migrants haven't been coming to the country over the past two years, there is an undersupply of workers out there. And there is a lot of activity and a lot of business opening up.
Hairdressers are getting pay rises, people in the building industry are getting pay raises. We're seeing pay go up. And yeah, I think that you're right. We're going to see a little bit of inflation for the short to medium term and we're going to feel it. But have you got any concerns about hyperinflation?
Peter Esho: (05:22)
No, not at all. And I'll tell you why, because see, we went through this big disruption to the global economy. COVID just really put everybody on their bum. All around the world, so it wasn't like we had an Asia problem, like SARS, for example, it wasn't like we had an Ebola problem, which was Africa and a little bit in the West. Everywhere nobody was immune from it. And so when that happens across the whole world, you get a disruption to everything, including supply chains.