Sydney, Australia (Commonwealth Union)_Ever since the pandemic hit the world, Australia has been battling rising unemployment and with the global economy showing signs of further slowing, means the country is not going to see better prospects in the near term. The nation’s jobless rate is slated to increase from a nearly 48-year low due to higher interest rates and slowing global growth, even though the Reserve Bank of Australia (RBA) forecasts inflation moderating over the next few months.
Australia saw its unemployment rate edged lower to 3.6 percent in May, despite analysts predicting a steady 3.7 percent, due to stubbornly high inflation. However, the RBA posits that in order to balance the economy, the unemployment rate must increase to about 4.5 percent, which is yet below pre-pandemic levels.
While the unemployment increase is expected as a consequence of higher interest rates and global economic uncertainty, the RBA kept its cash rate at an 11-year high of 4.10 percent but warned that further tightening may be needed. This is after the RBA lifted rates by 400 basis points in May last year.  Australia’s economy grew at its weakest pace in about one and half years in Q1, given the predictions of a further softening of the economy ahead.
In the March quarter of 2023, the economy grew by a marginal 0.2 percent compared to 2.3 percent in the same period in 2022, the sixth straight quarter of economic growth albeit the weakest quarterly growth since September 2021. Unemployment was at 3.5 percent, a nearly 50-year low. The consumer price index increased 1.4 percent, compared to 7 percent last year and this also meant a softening of the retail market, which saw the purchase of discretionary items falling by 1 percent.
