Australia: Inflation moderates in first quarter
May 15, 2012
In the first quarter, consumer prices rose 0.1% over the previous quarter, which was above the flat reading recorded in the fourth quarter but below market expectations of a 0.6% increase. Higher prices for education (+6.0% quarter-on-quarter) and healthcare (+4.4% qoq) were only partially offset by lower prices for food (-2.1% qoq) as well as for recreation (-2.0% qoq). Annual headline inflation plunged from 3.1% in the fourth quarter to 1.6% in the first. As a result, annual average inflation fell to 2.9%, down from 3.4% in the previous three-month period, marking its lowest level since the last quarter of 2010. The Reserve Bank of Australia (RBA) sees inflation ending this year at 3.25%. The RBA maintains a medium-term annual average inflation target of 2.0% - 3.0%.
Author: Armando Ciccarelli, Head of Data Solutions