The Reserve Bank of Australia's (RBA) deputy governor, Andrew Hauser, has minimised concerns over a recent inflation spike.

The Australian Bureau of Statistics reported that annual inflation increased from 3.6 per cent in April to 4 per cent in May, surpassing market expectations and raising speculation about an interest rate hike. 

Speaking at Citi's A50 Australian Economic Forum in Sydney, Hauser told business leaders and finance experts that other economic indicators must be considered before the RBA's next meeting in August. 

“There's a whole series of data coming out,” he said, including retail sales, employment figures, and the second quarter inflation number. 

“It would be a bad mistake to set policy on the basis of one number.”

Hauser, who joined the RBA from the Bank of England in February, emphasised Australia's prosperity despite economic challenges. 

He noted that Australia often ranks highly in measures of GDP and wealth per capita, contrasting this with the UK's stagnant GDP per capita since the global financial crisis.

He also highlighted Australia's potential in minerals and solar energy, pointing out the nation's vast reserves and solar capacity. 

However, Hauser stressed the need for foreign investment to fully exploit these resources, praising Australia's political and legal systems as key attractions for investors.

More detailed analysis is available here.