Australia Inflation Rate Slightly Below Estimates in Q4


Consumer prices in Australia rose 1.5 percent through the year to the fourth quarter of 2016 from 1.3 percent in the September quarter while markets expected a 1.6 percent rise. It was the highest inflation rate since the December quarter 2015, as a faster increase in prices of food and housing offset a drop in cost of transport.

Year-on-year, cost increased for: food and non-alcoholic beverages (1.8 percent from 1.5 percent in the September quarter), alcohol and tobacco (5.9 percent from 5.7 percent), housing (1.9 percent from 1.8 percent), furnishing, household equipment and services (0.6 percent from 1.9 percent), health (3.7 percent from 3.9 percent), education (3.3 percent from 3.3 percent) and insurance and financial services (2.7 percent from 2.9 percent). In contrast, cost declined for: clothing and footwear (-0.9 percent from 1.2 percent), financial services (2.9 percent from 2.4 percent), transport (-0.3 percent from 3.4 percent), communication (-5.9 percent from -7.5 percent) and recreation and culture (-0.5 percent from 0.6 percent). 

RBA Trimmed Mean CPI rose 1.6 percent year-on-year in the December quarter 2016, after gaining 1.7 percent in the preceding three quarters and slightly below consensus of a 1.7 percent gain. Quarter-on-quarter, the index increased 0.4 percent, the same as in the third quarter while markets estimated a 0.5 percent rise. RBA Weighted Mean CPI rose 1.5 percent year-on-year in the three months to December, up from a 1.3 percent growth in the third quarter and slightly above expectations of a 1.4 percent rise. For 2016, Australia's central bank targets core inflation of between 2.0 percent to 3.0 percent on average. 

On a quarterly basis, consumer prices rose 0.5 percent, following a 0.7 percent rise in the previous three month period and below market expectations of a 0.7 percent increase. The most significant price rises in the December quarter were tobacco (7.4 percent), automotive fuel (6.7 percent) and restaurant meals (+1.1 percent). These rises were partially offset by falls in furnishings, household equipment and services (-0.8 percent) and communication (-0.8 percent). 


Australia Inflation Rate Slightly Below Estimates in Q4


ABS l Rida Husna | rida@tradingeconomics.com
1/25/2017 2:12:09 AM