Australia Inflation Rate At 2-1/2-Year High Of 2.1% In Q1


Consumer prices in Australia rose 2.1 percent through the year to the March quarter of 2017 from 1.5 percent in the fourth quarter 2016 while markets expected a 2.2 percent rise. It was the highest inflation rate since the September quarter 2014, driven by a surge in cost of transport and an increase in cost of food and non-alcoholic beverages and housing.

Year-on-year, cost increased for: food and non-alcoholic beverages (1.8 percent from 1.8 percent in the December quarter 2016), alcohol and tobacco (6.1 percent from 5.9 percent), clothing and footwear (0.3 percent from -0.9 percent), housing (2.5 percent from 1.9 percent), health (3.8 percent from 3.7 percent), transport (3.8 percent from -0.3 percent), education (3.3 percent from 3.3 percent) and insurance and financial services (2.7 percent from 2.7 percent). In contrast, cost declined for: furnishing, household equipment and services (-0.1 percent from 0.6 percent), communication (-4.8 percent from -5.9 percent) and recreation and culture (-0.2 percent from -0.5 percent)  

RBA Trimmed Mean CPI rose 1.9 percent year-on-year in the first quarter 2017, after gaining 1.6 percent in the preceding quarter and slightly above consensus of a 1.8 percent gain. Quarter-on-quarter, the index increased 0.5 percent, the same as an upwardly revised figure in the December quarter and in line with market estimates. RBA Weighted Mean CPI rose 1.7 percent year-on-year in the three months to March 2017, up from a downwardly revised 1.4 percent growth in the fourth quarter and slightly below expectations of a 1.8 percent rise. 

On a quarterly basis, consumer prices rose 0.5 percent, the same as in the previous quarter but slightly  below market expectations of a 0.6 percent increase. The most significant price rises this quarter are automotive fuel (5.7 percent), new dwelling purchase by owner-occupiers (1.0 percent), medical and hospital services (1.6 percent) and electricity (2.5 percent). These rises were partially offset by falls in international holiday travel and accommodation (-3.8 percent), fruit (-6.7 percent) and furniture (-3.5 percent). 

ABS | Rida Husna | rida@tradingeconomics.com
4/26/2017 9:31:41 AM