Inflation rose 6.8 per cent within the 12 months to February, suggesting Australia’s economic system is on the monitor to normalisation.
It’s the second consecutive month of decrease annual inflation after the 8.4 per cent peak in December and the 7.4 per cent rise within the 12 months to January – however the determine remains to be nicely above the Reserve Bank’s intention of two to three per cent.
The Reserve Bank will probably be trying carefully on the newest information – launched on Wednesday by the Australian Bureau of Statistics – when it meets subsequent week to think about whether or not to boost rates of interest for the eleventh consecutive time.
The most vital contributors to the annual inflation improve to February had been housing (up 9.9 per cent), meals (8 per cent), transport (5.6 per cent) and recreation and tradition (6.4 per cent).
ABS head of statistics Michelle Marquardt famous the annual improve for the housing group was decrease than January (10.4 per cent).
“New dwellings grew 13.0 per cent in the 12 months to February which is the lowest annual growth since February 2022 as price rises for building materials continue to ease. Rent prices rose again due to the tight rental market, maintaining the 4.8 per cent annual growth recorded in January,” she mentioned.
Grocery costs have surged during the last yr, with an annual rise of 12.5 per cent for bread and cereal merchandise and a 14.3 per cent rise for dairy and associated merchandise.
Power costs had been up 17.2 per cent in contrast with a yr in the past.
The newest inflation figures come a day after the retail commerce numbers revealed a stagnant 0.2 per cent rise in February – nicely down from January’s 1.8 per cent rise.
Year-on-year, retail commerce was up 6.4 per cent.
The inflation figures are the final main piece of information forward of the RBA board’s subsequent assembly on Tuesday.
Given the annual inflation determine was nicely down in the marketplace expectation of seven.2 per cent, economists are predicting RBA governor Philip Lowe and the board will maintain rates of interest as they’re – 3.6 per cent – for a minimum of this month.
Greens financial spokesperson, Nick McKim, mentioned the RBA wanted to “act in the best interests” of Australians by pausing fee rises.
“Rate rises were never the right tool to tackle this bout of inflation. And now that inflation is coming down, the rate rises must stop,” he mentioned.
“Next week we will see if the RBA is finally prepared to act in the best interests of Australians instead of blindly following the rest of the world towards a recession.”
The Australian Chamber of Commerce and Industry has cautiously welcomed the sample of deflation.
“While still too high, it appears inflation has now peaked and is beginning to return to more sustainable levels,” ACCI chief govt Andrew McKellar mentioned.
“In reaching a decision at its April meeting, it’s critical that the Reserve Bank pause and take stock of the cumulative tightening that’s already in the system.
“Just like households, small businesses are feeling the pinch of rising rates and are yet to experience the full effect of a 3.5 per cent increase in just 10 months.”
Source: www.perthnow.com.au
