Australia reaches second-highest interest rate in the developed world
After the RBA hike, Australia now has the second-highest cash rate among 41 developed countries. Only Iceland's rate of 8% is higher.
Australia's rate is 4.6%. Australia is now second only to Iceland among developed countries, according to International Monetary Fund data.
Iceland's Central Bank set its rate at 8% in August. The Central Bank blamed price increases from the Middle East conflict.
Australia and Iceland both blame the same cause: higher energy and fuel costs. Iceland is a small island nation of almost 397,000 people.
It has a history of financial crisis. Its economy depends on importing almost everything except food it grows itself.
Treasurer Jim Chalmers rejected the comparison. He pointed out Australia's faster economic growth, lower debt and stronger job market.
Economist Saul Eslake agreed the nations are too different to compare fairly. But he warned both central banks should be careful about cutting rates too early.
Inflation might rise again.
- 4.6 per cent
- Australia's rate
- 8 per cent
- Iceland's rate
- 41 advanced economies (IMF definition)
- Countries compared
- Almost 397,000
- Iceland population
Why it mattersHigh rates are painful for people who borrow money. But comparisons with struggling economies like Iceland risk misreading Australia's true economic health.
AustraliaAustralia's place among the highest-rate nations globally may worry borrowers and savers but reflects different economic conditions than smaller, more vulnerable countries face.
✓ Claims checked against the source. checked 2 h ago
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