Weak Economic Growth has lowest CPI in 17 years…

28-Jul-2016

The Consumer Price Index (CPI) rose 0.4 per cent in the June quarter 2016, according to the latest Australian Bureau of Statistics (ABS) figures. This follows a fall of 0.2 per cent in the March quarter 2016.

The most significant price rises this quarter are in medical and hospital services (+4.2 per cent), automotive fuel (+5.9 per cent) and tobacco (+2.1 per cent). These rises are partially offset by falls in domestic holiday travel and accommodation (–3.7 per cent), motor vehicles (–1.3 per cent) and telecommunication equipment and services (–1.5 per cent).

The increase of 4.2 per cent for medical and hospital services was driven by the annual increase in Private Health Insurance (PHI) premiums, which rise on 1 April every year.

The increase of 5.9 per cent for automotive fuel follows three consecutive quarterly falls, with the rise driven by increases in unleaded, premium and ethanol fuels, as world oil prices increased from a 12-year low last quarter. 

The CPI rose 1.0 per cent through the year to the June quarter 2016. This is the weakest annual rise since the June quarter 199

A leading economist has warned Australia is in a "self-fulfilling cycle" of low productivity and wages growth given the CPI figures showed year-on-year inflation almost flat-lining at just 1%. Further it has been stated that while it is a long time since CPI figures were an "absolutely dominant determinant" (or a trigger for pay rises), it remains "one of the contributing factors keeping low nominal wage growth in place".