The Reserve Bank Australia has cautioned that country could have to face threats from inflation as reviving global economy has pushed oil prices up.

The central bank said Australia is more vulnerable to inflation due to her better shape as compared with the rest of the world.

During the year ended June, the consumer price index jumped by 1.5 per cent.

Core inflation was running at 3.9 per cent in the year to June, higher than the Central Bank’s target of 2.0 per cent to 3.0 per cent.

It may be noted here that earlier on October 7, Australia raise key interest rates by 25 basis points to 3.25 per cent, becoming the first developed economy to withdraw monetary stimulus.

RBA’s forewarning has astonished many economist, who think country prepare for deflation rather than inflation.