Australia has warned that widespread flooding will have a significant impact on the cost of living. Officials have said prices of fruits and vegetables will surge by more than 8% during the next six months. Thousands of people Saturday are being told to leave their homes as more storms hit eastern Australia.
Floods have hit parts of eastern Australia for the past two years. They have inundated some of the country’s most productive farmland across the states of New South Wales, Victoria and Tasmania.
The government has said it is too early to put an exact economic cost on the floods. The social, psychological and environmental impact of repeated flooding in some areas, where homes have been inundated three or four times in recent years, may never be known.
Federal treasurer Jim Chalmers has estimated that the floods will shave at least 0.25% off the country’s gross domestic product in the fourth quarter.
Cost of living pressures on many households will also increase.
Chalmers told reporters in Canberra Friday that next week’s federal budget would offer support to communities affected by the flooding.
“Responding to natural disasters and building resilience in our economy will be absolutely central features, he said. “Floods will cause fruit and vegetable prices, for example, to be 8% higher than otherwise over the next two quarters — the last quarter of this calendar year, first quarter of [the] next calendar year — and that is based on the impact of previous flooding on some of our prime agricultural land.”
In June, inflation reached 6.1%, a 21-year high in Australia. Economists expect it to hit 7.5% by the end of the year because of various domestic and international factors, including the impact of the war in Ukraine on global food and energy supplies.
Flood warnings stretch from Queensland to Victoria and onto the island state of Tasmania.
The government has said five people have died in flood waters in Victoria and in New South Wales.
Prime Minister Anthony Albanese said in a statement Saturday that three helicopters were on standby for night rescues and 150 additional troops were joining the emergency effort.
