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CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, according to the Real Estate Institute of Australia (REIA).
CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, according to the Real Estate Institute of Australia (REIA).
REIA President Leanne Pilkington noted that while the February figure remained steady, monthly figures are less reliable than quarterly data, as recently pointed out by the Treasurer. "The downward trend in inflation is undeniable, with monthly figures not having increased since the peak of 8.4% in December 2022," Ms Pilkington said.
The annual movement for the monthly CPI, excluding volatile items such as fruit and vegetables, automotive fuel, and holiday travel and accommodation, rose 3.9% in February, down from 4.1% in January and showing decreases every month since March last year.
Ms Pilkington said the latest CPI data provides an important piece in the Reserve Bank of Australia's (RBA) decision-making puzzle, as the central bank relies on data and evolving risk assessments while paying close attention to domestic and overseas developments. Other key data points, including retail trade, household spending, unemployment, and the March quarter CPI, will be available before the RBA's next meeting in early May.
The most significant contributors to the annual increase in the February CPI were housing (up 4.6%), food and non-alcoholic beverages (up 3.6%), alcohol and tobacco (up 6.1%), and insurance and financial services (up 8.4%). Rents increased by 7.6% in the 12 months to February, up from 7.4% in the year to January.
"The 13 rate hikes by the RBA since May 2022 are not only stemming the inflation tide but also slowing the economy," Ms Pilkington said. "As the pieces of RBA's jigsaw fall into place, the expectation is that the RBA will provide home buyers some interest rate relief later this year."
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