Saturday, December 9, 2023

Australia’s consumer price index could rise due to fuel prices

Australia’s consumer price index is expected to rise due to rising fuel prices, according to a report from the Australian Bureau of Statistics. July saw a significant slowdown in inflation, falling from 5.4% in June to 4.9% in July. However, AMP economists expect the indicator to rise slightly to 5.3% per year in August. On the other hand, ANZ forecasts a flat result of 4.9% and economists at the Commonwealth Bank expect it to rise to 5.1%. This increase is largely due to the 8-12% increase in fuel and diesel prices during the month.

The consumer price index will also provide important information about service sector inflation, which is a concern for the Reserve Bank. The central bank has raised interest rates to combat inflation, and a renewed rise in inflation could complicate its efforts. Treasurer Jim Chalmers acknowledges that inflation figures can fluctuate, but believes the general direction is downward.

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In addition to the consumer price index, the Australian Bureau of Statistics will also release retail sales for August. This data provides information about the health of the household sector of interest to the Reserve Bank. In addition, financial and asset data for the second quarter of June as well as credit data will be published. RBA Deputy Governor Brad Jones is expected to take part in a panel discussion and provide further insight into the economic situation.

Local investors also need to consider the impact of a turbulent week on Wall Street. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all posted losses as investors reacted to Federal Bank’s outlook revisions. Australian share futures fell in response, with the benchmark S&P/ASX200 index having its worst week in a year, losing 2.9% in five trading days.

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In summary, rising fuel prices are expected to contribute to an increase in the consumer price index. This could complicate the Reserve Bank’s efforts to combat inflation through interest rate adjustments. Additionally, upcoming data releases and market fluctuations will provide further insights into economic conditions and investor sentiment.

Nation World News Desk
Nation World News Desk
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