Richard Holden, Professor of Economics, UNSW Australia says that a large chunk of data was released last week, with more to come this week. And while nothing was either shocking or terrible, there is mounting evidence the world’s economic growth problem is even more entrenched.
Australian inflation was keenly anticipated because of the surprising and concerning low figure last quarter. All groups CPI came with an increase of 0.4% for the quarter, compared to a fall of 0.2% in the prior quarter.
But that puts annual growth over the last 12 months at just 1.0%, well below the Reserve Bank’s target band of 2-3% year. The number was encouraging in part because of the bounce back, but distressing because it puts annual inflation even further away from the RBA target. That increases the already significant likelihood of an interest rate cut, or two, in coming months.
