Australia: Inflation at over five-year high at 2020 outset, sits within the Central Bank’s target band
In the first quarter of 2020, consumer prices rose 0.3% over the previous quarter following a 0.7% increase in the last quarter of 2019, according to the Australian Bureau of Statistics (ABS). The figure beat market expectations of a 0.2% increase although marked the slowest rise since Q1 2019. According to the ABS, Q1’s deceleration was mainly the result of falling prices for clothing and footwear; recreation and culture; and transport on the back of lower oil prices. These were only partially offset by a faster rise in prices for education and a rebound in health prices.
Inflation climbed to 2.2% in Q1 from Q4’s 1.8%, beating market expectations of a 2.0% inflation and marking the highest reading since Q3 2014. Therefore, inflation moved into the Reserve Bank’s 2.0%–3.0% target band. Regional variations persisted: Inflation came in between 1.5% and 2.7% everywhere excluding Hobart, where it logged 3.4%.