Inflation in Australia
Australia - Inflation
Inflation accelerates in Q2, driving up the AUD
In the second quarter of 2019, consumer prices jumped 0.6% over the previous quarter following a flat reading in the first quarter, according to the Australian Bureau of Statistics (ABS). The figure beat market expectations of a 0.5% quarter-on-quarter increase and marked the highest print in one-and-a-half years. According to the ABS, Q2’s rise was mainly the result of higher prices for transport, health, and for alcohol and tobacco, which were only partially offset by lower prices for communication, housing and food and non-alcoholic beverages.
Inflation rose to 1.6% in Q2 from Q1’s 1.3%, again overshooting market expectations. Therefore, inflation moved closer to the Reserve Bank’s 2.0%–3.0% target band. Regional variations persisted: Inflation came in between 1.3% and 1.7% everywhere excluding Hobart, where it exceeded 2.0%, and Darwin, where it was 0.8%.
Some pick-up in wage growth and early signs of bottoming out in house prices in the East coast will probably push inflation up. Markets reacted by driving the Australian dollar up, as they pared expectations for a rate cut at the Reserve Bank’s August meeting.
FocusEconomics panelists expect inflation to average 2.3% in 2019, which is unchanged from last month’s forecast, and 2.2% in 2020.
Australia - Inflation Data
|Inflation Rate (CPI, annual variation in %)||2.4||2.5||1.5||1.3||1.9|
5 years of economic forecasts for more than 30 economic indicators.
Australia Inflation Chart
Source: Australia Bureau of Statistics and FocusEconomics calculations.
|Bond Yield||1.19||1.47 %||Jul 31|
|Exchange Rate||0.69||0.05 %||Jul 31|
|Stock Market||6,897||0.08 %||Jul 31|
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August 15, 2019
Seasonally-adjusted employment rose by 41,100 in July, contrasting a revised 2,300 jobs slashed in June (previously reported: +500).
August 14, 2019
The Westpac-Melbourne Institute consumer sentiment index rebounded from a 23-month low of 96.5 in July to 100.0 in June.
August 13, 2019
The business confidence index produced by National Australia Bank (NAB) rose to plus 4.0 points in July from June’s 2.2 points.
August 6, 2019
At its 6 August monetary policy meeting, the Reserve Bank of Australia (RBA) kept the cash rate unchanged at an all-time low of 1.00%.
August 2, 2019
Nominal retail sales in June rose a healthy 0.4% over the previous month in seasonally-adjusted terms, accelerating from May’s subdued 0.1% uptick.