Save
CPI improves for December quarter
Pressure on the Reserve Bank of Australia to cut interest rates in February has further diminished following the release of December’s Consumer Price Index (CPI).
CPI improves for December quarter
Pressure on the Reserve Bank of Australia to cut interest rates in February has further diminished following the release of December’s Consumer Price Index (CPI).
With the drought continuing to have an impact on Australians’ back pocket, the CPI rose by 0.7 of a percentage point in the December 2019 quarter, according to the Australian Bureau of Statistics.
The official figures are in line with forecasts, further denting chances of a rate cut in February following stronger growth numbers in December.
The CPI rose by 1.8 per cent through the year to the December 2019 quarter, following a year’s rise of 1.7 per cent to the September 2019 quarter.
The most significant price rises in the December 2019 quarter were for tobacco (+8.4 per cent); domestic holidays, travel and accommodation (+7.3 per cent); automotive fuel (+4.4 per cent); and fruit (+6.8 per cent).
The most significant price falls this quarter were for international holidays, travel and accommodation (-2.9 per cent) and women’s garments (-2.5 per cent).
ABS chief economist Bruce Hockman said: “Drought conditions are impacting prices for a range of food products. Food prices increased [by] 1.3 per cent this quarter, with price rises for beef and veal (+2.9 per cent), pork (+4.7 per cent), milk (+1.7 per cent) and cheese (+2.4 per cent). Both the impact from the drought and lower seasonal supply contributed to price rises for fruit (+6.8 per cent) this quarter.”
However, Mr Hockman noted annual inflation remains subdued partly due to the fall in housing-related expenses.
“Through the year to the December 2019 quarter, price falls were recorded for utilities (-1.0 per cent) and new dwelling purchase by owner-occupiers (-0.1 per cent), while rent price rises remained modest (+0.2 per cent),” Mr Hockman said.
AMP’s senior economist, Diana Mousina, has warned that low inflation could remain an issue throughout 2020.
“The persistence of the low inflation environment is likely to remain an issue in 2020. Stronger economic growth and higher inflation expectations are required to lift inflation,” Ms Mousina said.
“Other well-known forces like technological improvements, globalisation and competition resulting in easy transportation of goods are keeping down the prices for goods.”
nestegg has previously reported that the central bank is set to hold off February’s rate cut following a stronger-than-expected bounce in the labour market.
RELATED ARTICLES
About the author
About the author
Expenses
Expert tips to secure your financial safety net
New Zealanders are known for their "she'll be right" attitude, but when it comes to handling unexpected bills, being prepared is crucial. Read more
Expenses
Australians continue to opt for free VPNs, ignoring potential privacy risks
Australians, alongside citizens of Sweden, South Korea, and Mexico, are increasingly choosing to use free Virtual Private Networks (VPNs), despite the potential threats to their privacy. Read more
Expenses
Rooftop solar in childcare centres could cut energy bills by millions
The analysis conducted by Parents for Climate has revealed that the installation of rooftop solar and batteries in early childhood education and care (ECEC) centres could lead to savings of up to $130 ...Read more
Expenses
Corporate Traveller identifies key strategies for business travel savings
Flight Centre Travel Group's Corporate Traveller, a premier service provider for managing SME travel, has shared several effective strategies that enabled their business clients to significantly ...Read more
Expenses
Price no longer the prime factor for energy bills
Many Australians are intrigued but unconvinced when it comes to greening their energy bill. Read more
Expenses
1 in 2 Aussie pet owners spends on their pets more than themselves
Does owning a pet eat into your monthly budget? You’re not alone. Read more
Expenses
The real reason Sydney’s petrol prices are so high
Sydney fuel prices may seem like they’re soaring, but a recent study indicates that they may be cheaper than you think. Read more
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. Read more
Expenses
Expert tips to secure your financial safety net
New Zealanders are known for their "she'll be right" attitude, but when it comes to handling unexpected bills, being prepared is crucial. Read more
Expenses
Australians continue to opt for free VPNs, ignoring potential privacy risks
Australians, alongside citizens of Sweden, South Korea, and Mexico, are increasingly choosing to use free Virtual Private Networks (VPNs), despite the potential threats to their privacy. Read more
Expenses
Rooftop solar in childcare centres could cut energy bills by millions
The analysis conducted by Parents for Climate has revealed that the installation of rooftop solar and batteries in early childhood education and care (ECEC) centres could lead to savings of up to $130 ...Read more
Expenses
Corporate Traveller identifies key strategies for business travel savings
Flight Centre Travel Group's Corporate Traveller, a premier service provider for managing SME travel, has shared several effective strategies that enabled their business clients to significantly ...Read more
Expenses
Price no longer the prime factor for energy bills
Many Australians are intrigued but unconvinced when it comes to greening their energy bill. Read more
Expenses
1 in 2 Aussie pet owners spends on their pets more than themselves
Does owning a pet eat into your monthly budget? You’re not alone. Read more
Expenses
The real reason Sydney’s petrol prices are so high
Sydney fuel prices may seem like they’re soaring, but a recent study indicates that they may be cheaper than you think. Read more
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- ACE25
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.