Australia Q4 Inflation Rate at Over 1-Year Low of 1.8%


Australia's consumer price inflation edged down to 1.8 percent year-on-year in the last quarter of 2018 from 1.9 percent in the previous period and above market expectations of 1.7 percent. It was the lowest inflation rate since the third quarter of 2017, mainly due to a marked slowdown in cost of transport.

Year-on-year, cost of transport increased by 2.8 percent in the three months to December, slower than a 6 percent gain in the previous period, mostly due to automotive fuels (6.7 percent vs 20.8 percent). Also, prices of food and non-alcoholic beverages increased 1.5 percent, easing slightly from a 1.6 percent rise in the prior quarter, driven by fruits and vegetables (1.6 percent vs 5 percent). In addition, cost of housing advanced 1.5 percent, compared to a 1.6 percent rise in the third quarter, mainly due to rents (0.5 percent vs 0.6 percent) and new dwelling purchase by owner-occupiers (1.8 percent vs 2 percent). At the same time, cost rose at a softer pace for education (2.7 percent vs 2.8 percent). while continued to fall for: and 

On the other hand, prices went up further for health (3.3 percent vs 3.2 percent); insurance and financial services (1.5 percent vs 1.4 percent); and recreation and culture (1.7 percent vs 1.2 percent). Additionally, cost declined less for clothing and footwear (-0.7 percent vs -0.8 percent) and furnishings, household equipment and services (-0.8 percent vs -2 percent) and continued to fall for communication (-4.3 percent, the same as in Q3). Also, inflation was steady for alcoholic and tobacco (at 6.8 percent, the same as in Q3).

RBA Trimmed Mean CPI rose 1.8 percent year-on-year in the fourth quarter, the same as in the previous period and matching expectations. Quarter-on-quarter, the index increased by 0.4 percent, unchanged from the prior three months' figure and in line with estimates. RBA Weighted Mean CPI went up 1.7 percent year-on-year, the same as in the third quarter and matching forecasts.

On a quarterly basis, consumer prices went up 0.5 percent, after a 0.4 percent rise in in the September quarter and slightly above consensus of 0.4 percent. It marked the highest quarterly figure since the last quarter of 2017. The most significant price rises were tobacco (9.4 percent), domestic holiday travel and accommodation (6.2 percent), fruit (5.0 percent) and new dwelling purchase by owner-occupiers (0.4 percent). Meantime, the most significant price declines were automotive fuel (-2.5 percent), audio visual and computing equipment (-3.3 percent), wine (-1.9 percent), and telecommunications equipment and services (-1.5 percent).


Australia Q4 Inflation Rate at Over 1-Year Low of 1.8%


ABS l Rida Husna | rida@tradingeconomics.com
1/30/2019 11:43:46 AM