Australia Inflation Q2 2020


Australia: Annual consumer prices fell for first time since 1998

July 29, 2020

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.

Our panelists see inflation averaging 1.2% in 2020 and 1.6% in 2021%.

Author: Massimo Bassetti, Senior Economist

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Australia Inflation Chart

Australia Inflation Q2  20 20 0

Note: Year-on-year and quarter-on-quarter variation of consumer price index in %.
Source: French Statistics Institute (INSEE).

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