Australia Inflation Rate Eases to 1.3% YoY in Q1


Consumer prices in Australia rose 1.3 percent through the year to the March quarter of 2016 from 1.7 percent in the previous quarter and below market consensus. On a quarterly basis, consumer prices unexpectedly dropped by 0.2 percent, following a 0.4 percent increase in the December quarter. It is the first decline since the fourth quarter of 2008.

Year-on-year, cost increased for: alcohol and tobacco (+6.1 percent from +6.0 percent in the December quarter 2015); housing (+1.7 percent from +2.2 percent); furnishing, household equipment and services (+2.0 percent from +1.9 percent), health (+4.6 percent from +5.3 percent), recreation & culture (+0.1 percent from +1.7 percent), education (+3.3 percent from +5.5 percent) and insurance and financial services (+2.3 percent from +1.8 percent). In contrast, cost declined for clothing & footwear (-0.8 percent from +0.5 percent), transport (-0.5 percent from -1.4 percent) and communication (-6.4 percent from -6.3 percent). Prices of food and non-alcoholic beverages remained unchanged, compared to a 0.4 percent rise in the preceding quarter.

RBA Trimmed Mean CPI rose 1.7 percent year-on-year in the first quarter of 2016, slowing from a 2.1 percent in the previous quarter and below estimates of a 2.0 percent rise. Quarter-on-quarter, the index increased 0.2 percent, down from 0.6 percent in the December quarter. RBA Weighted Mean CPI rose 1.4 percent year-on-year in the March quarter 2016, easing from 1.9 percent. Quarter-on-quarter, the index rose 0.1 percent from 0.5 percent. For 2016, Australia's central bank targets core inflation of between 2.0 percent to 3.0 percent on average.

Quarter-on-quarter, consumer prices unexpectedly dropped by 0.2 percent, following a 0.4 percent increase in the December quarter. It is the first decline since the fourth quarter of 2008. The fall in the CPI this quarter was broad based, with six out of the eleven CPI groups recording a fall for the quarter.  The most significant price falls this quarter were automotive fuel (-10.0 percent), fruit (-11.1 percent) and international holiday travel and accommodation (-2.0 percent). The most significant offsetting price rises this quarter were secondary education (+4.6 percent), medical and hospital services (+1.6 percent) and pharmaceutical products (+4.8 percent).

Australia Inflation Rate Eases to 1.3% YoY in Q1


ABS l Rida Husna | rida@tradingeconomics.com
4/27/2016 7:38:19 AM