Sydney, Jan 25 (IANS) Australia’s consumer price index (CPI) was unchanged in the December quarter 2011, compared with a rise of 0.6 percent in the September quarter, the Australian Bureau of Statistics (ABS) reported Wednesday.
Economists had forecast a rise of 0.2 percent in the quarter and an annual rate of 3.3 percent, said Xinhua.
The most significant price rises in the December quarter 2011 were for domestic holiday travel and accommodation, rents, telecommunication equipment and services, beer and automotive fuel, the ABS said.
The most significant offsetting price falls were for fruit, pharmaceutical products, vegetables, audio, visual and computing equipment, international holiday travel and accommodation and motor vehicles, it said.
Australia’s economists say the weaker-than-expected figures increase the chance of rate cut by the Reserve Bank of Australia (RBA) in February.
“I think it is a done deal now that the Reserve Bank will cut rates,” Australia’s financial services firm CommSec economist Savanth Sebastian said.
“The Australian economy has been quite sluggish, global growth forecasts have been cut and I think the Reserve Bank will take out a little bit more insurance in these volatile times.”
The RBA cut the rate by 25 percentage points in November and again, by the same amount, in December.
Sebastian’s view was echoed by Commonwealth Bank chief currency strategist Richard Grace.
“There’s no hindrance for the RBA to cut rates from an inflation point of view because inflation is coming down,” Grace said.
“It suggests that the RBA can cut rates if they want to.”
