Australia: Inflation ticks down in Q4
January 31, 2019
In the fourth quarter of 2018, consumer prices rose 0.5% over the previous quarter, according to the Australian Bureau of Statistics (ABS). The figure came short of market expectations but above the 0.4% quarter-on-quarter increase recorded in the previous quarter. According to the ABS, Q4’s print reflected higher prices for tobacco, domestic holiday travel and accommodation, and fruit, which were partially offset by lower prices for automotive fuel, audio visual and computing equipment, and wine.
Inflation inched down to 1.8% in Q4 from Q3’s 1.9%, again undershooting market expectations. It was the lowest reading in two years and moved further 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, Hobart 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.
Australia Inflation Forecast
FocusEconomics panelists expect inflation to average 2.3% in 2019, which is unchanged from last month’s forecast, and 2.2% in 2020.