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The prime minister has expressed his "optimism" about the future of the Australian economy, even as economists warn of the rising prospect of a recession.
- Some economists have warned the prospect of a recession has grown
- Anthony Albanese says he is optimistic about Australia's economy
- Growth has slowed to 0.2 per cent and further rate rises are possible
Anthony Albanese was speaking in Sydney for the first time since the Reserve Bank lifted the cash rate to 4.1 per cent, and left the door open to further rate rises.
RBA governor Philip Lowe has warned the economy has a "narrow path" back to normality, in attempting to drive down inflation without heading into a recession.
Some economists have suggested that path is becoming more difficult to tread, pointing to persistent inflation in many parts of the economy, while growth slowed to just 0.2 per cent in the most recent quarter.
Commonwealth Bank economist Gareth Aird said on Wednesday the risk was clearly growing.
"It's certainly gone up; with every rate hike it goes up," he told ABC Radio.
"We're at the point now where I think the idea that the RBA can keep the economy on an even keel has now been further diminished."
Mr Lowe has acknowledged the substantial impact of rising rates on households, but warned the consequences of longer-term inflation would be much worse.
Questioned on the prospect of a recession, Mr Albanese said he remained hopeful.
"I am very positive about Australia's future," he said.
"I think we need to continue to invest in education and training, invest in infrastructure, invest in our people.
"We're not immune to global impacts, and the global inflation impact is there for all to see in all the G7 countries.
"This is a global phenomenon, but Australia has a path through."
The government has avoided commenting on the interest rate hike directly, however the Treasurer has suggested some households would find the decision hard to understand.
Asked about the interest rate hike, Mr Albanese said the government is doing what it can to make the RBA's job easier.
"The RBA have made a decision that they make independent of government. They're responsible for monetary policy," he said.
"What my government has done is make sure, as Treasury and the RBA governor have acknowledged, is put that downward pressure on inflation."
The Coalition has for weeks tried to link inflation to the government's May budget, despite commentary from both Treasury and the RBA that the budget's inflation impact was "broadly neutral".
Opposition Leader Peter Dutton told Nine Radio the government should be bearing responsibility for rising rates.
"The government said that they had a plan to bring interest rates down, and they had a plan to reduce your energy prices, and it hasn't happened," he said.
"It's got a lot worse."