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.
About the author
About the author
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
Half-price flight scheme launches today
Aussies are being offered half-price flights as the government looks to spur domestic travel to regions it has defined as key to economic recovery. ...Read more
Expenses
Insurance prices rise despite payout falls
The COVID-19 pandemic has seen insurer payouts fall by $500 million, but Australian consumers are continuing to pay more, the consumer watchdog has revealed. ...Read more
Expenses
CBA cops civil proceedings for overcharged interest
ASIC has commenced civil penalty proceedings in the Federal Court against the Commonwealth Bank over the bank charging an interest rate on business overdraft accounts that was substantially higher tha...Read more
Expenses
What are the top 10 most expensive cities in the world?
Logistical issues and currency fluctuations caused by the COVID-19 pandemic has seen the most expensive cities in the world drastically change, new research has revealed. ...Read more
Expenses
Sydney adviser pleads guilty to misappropriating $2.9m
A Sydney financial adviser has pleaded guilty to misappropriating $2.9 million in his clients’ funds. ...Read more
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
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
Half-price flight scheme launches today
Aussies are being offered half-price flights as the government looks to spur domestic travel to regions it has defined as key to economic recovery. ...Read more
Expenses
Insurance prices rise despite payout falls
The COVID-19 pandemic has seen insurer payouts fall by $500 million, but Australian consumers are continuing to pay more, the consumer watchdog has revealed. ...Read more
Expenses
CBA cops civil proceedings for overcharged interest
ASIC has commenced civil penalty proceedings in the Federal Court against the Commonwealth Bank over the bank charging an interest rate on business overdraft accounts that was substantially higher tha...Read more
Expenses
What are the top 10 most expensive cities in the world?
Logistical issues and currency fluctuations caused by the COVID-19 pandemic has seen the most expensive cities in the world drastically change, new research has revealed. ...Read more
Expenses
Sydney adviser pleads guilty to misappropriating $2.9m
A Sydney financial adviser has pleaded guilty to misappropriating $2.9 million in his clients’ funds. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
