Australia: Annual consumer prices fell for first time since 1998
In the second quarter of 2020, consumer prices dived 1.9% over the previous quarter swinging from a 0.3 % increase in Q1. The figure broadly matched market expectations of a 2.0% decrease and marked the sharpest drop on record. Q2’s slump was mainly the result of falling oil prices as well as of the government’s decision to make childcare free from early April to late June.
Annual prices fell 0.3% in Q2 contrasting Q1’s 2.2% rise and largely in line with market expectations of a 0.4% decline. The result marked the lowest reading since Q3 1997. Therefore, inflation tumbled well below the Reserve Bank’s 2.0%–3.0% target band.