Australian inflation has remained soft in the March quarter, new ABS figures reveal, but there is a drastic divide in the inflationary pressures evident on a state-by-state basis.
The latest Consumer Price Index (CPI) figures posted a rise of just 0.4 per cent for the quarter, down from the 0.6 per cent recorded in the December quarter of 2017.
That result left the yearly figure steady at 1.9 per cent – still just below the Reserve Bank’s official target of 2 to 3 per cent.
Leading the charge on inflationary pressures were a 6 per cent spike in gas and household fuels and a 5.6 per cent rise in the cost of pharmaceuticals. Vegetables (3.7 per cent), secondary education (3.3 per cent) and medical and hospital services (1.5 per cent) were also more expensive.
Keeping a lid on inflation, though, were substantial price falls in audio, visual and computing media and services (down 6.1 per cent), while furniture and international holiday travel were cheaper by 2.8 per cent and 2.4 per cent respectively.
However, while headline inflation sits at 1.9 per cent, this masks drastically divergent situations among the states and territories.
“While the annual CPI rose 1.9 per cent, most east coast cities have continued to experience annual inflation above 2.0 per cent, due in part to the strength in prices related to housing and food,” said Bruce Hockman, chief economist at the ABS.
“Softer economic conditions in Darwin and Perth have resulted in annual inflation remaining subdued at 1.1 and 0.9 per cent respectively.”
Brisbane also recorded a weak inflation reading of just 1.7 per cent for the quarter.
Canberra, Adelaide, Melbourne and Sydney all recorded inflation of above 2 per cent, while Hobart came in right on 2 per cent.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.