Australia: Inflation ticks up in Q2
July 25, 2018
In the second 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 market expectations of a 0.5% increase and matched the previous quarter’s reading. According to the ABS, Q2’s print was underpinned by higher prices automotive fuel, medical and hospital services and tobacco, which were partially offset by lower prices for domestic holiday travel and accommodation, motor vehicles and vegetables.
Inflation ticked up to 2.1% in Q2 from Q1’s 1.9%, again slightly undershooting market expectations and within 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. 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 2.1% in 2018, which is unchanged from last month’s forecast, and 2.3% in 2019.