SYDNEY, July 28 (Reuters) – Australia’s consumer prices rose at the fastest annual pace in almost 13 years last quarter as petrol jumped and government subsidies unwound, but a far tamer reading for core inflation suggested the spike would be fleeting.
Indeed, the run-up has already been overtaken by events as coronavirus lockdowns in major population centers will almost certainly send the economy backwards this quarter, a powerful argument for extended monetary and fiscal stimulus.
“The heightened risk posed by the delta variant will result in the economy contracting sharply in the September quarter,” said Sarah Hunter, chief Australia economist for BIS Oxford Economics. “Against this backdrop core inflation is likely to remain subdued.”
Wednesday’s data from the Australian Bureau of Statistics showed the headline consumer price index (CPI) rose 0.8% in the June quarter, from the previous quarter, just topping market forecasts of a 0.7% increase. Reuters
