Australia: Inflation steady in Q1
May 1, 2018
In the first quarter of 2018, consumer prices rose 0.4% over the previous quarter, according to the Australian Bureau of Statistics (ABS). The figure came in below both market expectations of a 0.5% increase and the previous quarter’s 0.6% reading. According to the ABS, Q1’s print was underpinned by higher prices for education and health, which were partially offset by lower prices for clothing and footwear, and recreation and culture.
Inflation remained stable at Q4’s 1.9% in Q1, again slightly undershooting market expectations and just below the Reserve Bank’s 2.0%–3.0% target band. Substantial regional variations persisted: Inflation exceeded 2.0% along most of the East Coast, whereas more subdued readings in Darwin and Perth dragged on the overall figure. Soft wage growth was likely behind Q1’s moderate inflation pressures and will give the RBA room to maintain its loose monetary stance in the months to come.
Australia Inflation Forecast
FocusEconomics panelists expect inflation to average 2.1% in 2018, which is unchanged from last month’s forecast, and 2.3% in 2019.