Australia: Inflation dips in Q3
October 31, 2018
In the third quarter of 2018, consumer prices rose 0.4% over the previous quarter, according to the Australian Bureau of Statistics (ABS). The figure came in line with market expectations and matched the previous quarter’s reading. According to the ABS, Q3’s print was underpinned by higher prices for recreation and culture, alcohol and tobacco, transport, and food and non-alcoholic beverages, which were partially offset by lower prices for child care, pushed down by a government subsidy introduced in early July.
Inflation ticked down to 1.9% in Q3 from Q2’s 2.1%, again matching market expectations and just below the Reserve Bank’s 2.0%–3.0% target band. Substantial regional variations persisted: Inflation came in at 2.0% or above in Canberra, Sidney and Melbourne, whereas more subdued readings in Darwin and Perth dragged on the overall figure. Moderate wage growth likely continued to keep inflation in check and will give the RBA room to maintain its loose monetary stance in the months to come.