Australia Inflation Rate Accelerates Further in Q1


Australian annual consumer prices advanced 2.9 percent in the first three months of 2014, up from 2.7 percent in the previous quarter, but below market forecasts. The rise was driven by seasonal increases in cost of healthcare, transport and school fees, and by a large hike in tobacco duties.

Year-on-year, the most significant price rises this quarter were for tobacco (+6.8 percent), education (5.1 percent), health (4 percent), housing (3.6 percent), recreation and culture (2.7 percent) and transport (2.5 percent). Cost of clothing and footwear recorded the lowest annual increase (0.5 percent). 

Compared with the last three months of 2013, consumer prices slowed to 0.6 percent, after rising 0.8 percent in the December quarter. 

The most significant price rises this quarter were for tobacco (+6.7 percent), automotive fuel (+4.1 percent), secondary education (+6.0 percent), tertiary education (+4.3 percent), medical and hospital services (+1.9 percent) and pharmaceutical products (+6.1 percent). These rises were partially offset by falls in furniture (-4.3 percent), maintenance and repair of motor vehicles (-3.3 percent), international holiday travel and accommodation (-2.4 percent) and domestic holiday travel and accommodation (-2.4 percent).

The tobacco price increase was caused by the federal excise tax rise from 1 December 2013 as well as the March 2014 biannual indexation based on the ABS' Average Weekly Ordinary Times Earnings (AWOTE) rate.

Education prices have risen with the commencement of the new school year.

Rises for medical and hospital services and pharmaceutical products were a result of the cyclical reduction in the proportion of patients who qualify for subsidies under the Medicare Benefits Scheme and Pharmaceutical Benefits Scheme at the start of each calendar year.

Australia Inflation Rate Accelerates Further in Q1


ABS | Joana Taborda | joana.taborda@tradingeconomics.com
4/23/2014 8:40:56 AM