Annual Inflation Rate Now 2.6%

The Australian Bureau of Statistics today announced that the Consumer Price Index (CPI) – the main measure of inflation - had risen 0.8% in the December quarter.

The increase is double that recorded in the September quarter, and compares to an anticipated rise of 0.6%.

Australia’s annual inflation rate now stands at 2.6%, the highest it has been since the September quarter of 2003. This is still within the Australian Reserve Bank's 2 to 3% target range.

With what could be generalised as “moderate” inflation, the Australian economy remains very strong and with the lowest unemployment rate in around 30 years.

For the final months of 2004, the Bureau of Statistics said the cost of living was pushed up by higher house purchase costs, petrol, cars, domestic travel, rent, fruit, beer and restaurant meals.

The CPI results have again raised expectations that official interest rates might be raised during 2005, to dampen the economy slightly.

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David
editor@agarcarlyon.com