Question

Australia’s inflation rate increases to 6%; what will happen to the Australian International Education sector?

Answer 1

WHEN AUSTRALIA'S INFLATION RATE INCREASES TO 6%, IT WILL ADVERSLY AFFECT AUSTALIAN INTERNATIONAL EDUCATION SECTOR. THIS IS BECAUSE 6% INFLATION IS VERY HIGH COMPARED TO LAST YEAR RATE OF 1.6 % (2019)

FROM 5% TO 10%, RATE OF INFLATION IS KNOWN AS WALKING INFLATION. IF IT RISES ABOVE 10% AND BELOW 20% IT IS KNOWN AS RUNNING INFLATION. IF THE ECONOMY ENTERS IN THE WALKING INFLATION STAGE(ABOVE 5%), THEN TERMS OF TRADE ARE ADVERSLY AFFCTED. BECAUSE INFLATION REDUCES THE VALUE OF DOMESTIC CURRENCY.

AS FAR AS AUSTRALIAN INTERNATIOANL EDUCATION SECTOR IS CONCERNED, IT IS PROVIDING WORLD CLASS STANDARDS. SO MODERALE LEVEL OF INFLATION WILL NOT AFFECT IT. BY MODERATE LEVEL OF INFLATION WE HERE MEAN AROUND 2% TO 4%. BESIDES, IT IS GENERALLY AGREED THAT MODERATE LEVEL OF INFLATION IS CONDUCIVE TO ECONOMIC DEVELOPMENT .

IF IT RISES ABOVE 5% THEN , IT WILL DEFINITELY AFFECT AUSTRALIAN INTERNATIONAL EDUCATION SYSTEM. BECAUSE THESE INSTITUTIONS GET LESS MONEY IN REAL TERMS FROM THE SEMESTER FEE. AS A RESULT OF INFLATION COST OF LIVING WILL INCREASE IN AUSTRALIA. SO FOREIGN STUDENTS START PREFER OTHER COUNTRIES WITH LOW COST OF LIVING. FOR COMPENSATING INFLATION LOSS, INSTITUTIONS MAY INCREASE THEIR FEE FOR VARIOUS PROGRAMMES. THIS WILL ALSO ADVERSLY AFFECT THIS INDUSTRY.