Australia Inflation Expectations Rise for Second Straight Month in February
By Jerin Mathew | February 14, 2013 5:03 PM EST
Inflation expectations in Australia have increased for the second consecutive month in February, according to the Melbourne Institute Survey of Consumer Inflationary Expectations.
The survey gauges the percentage change that consumers expect on the price of goods and services during the next 12 months.
Consumers' expected inflation rate to hike to 2.2 percent in February from 2 percent in January. Nevertheless, the rate still remains within the Reserve Bank of Australia's (RBA) target inflation range of 2-3 percent.
"The consumer expected inflation rate has risen in two consecutive months for the first time since April 2012, by 0.4 percentage points in total," Viet Nguyen, a Research Fellow at the Melbourne Institute, said in a statement.
Nguyen added that, from an inflation-targeting perspective, there has not been enough evidence of strong inflationary pressure for the RBA to react. Consumers' expected inflation rates were 2.7 percent in February as against the 4.6 percent in February 2011 and 3.2 percent in February 2010.
Consumers' expectation for higher inflation over the next 12-month period indicates greater confidence in the economy though the retail sales declined for a third month in December and unemployment rate remained the same at 5.4 percent.
Following the news, the Aussie gained against the US dollar initially, but quickly retreated back to pre-release levels. The Australian currency is currently trading at US$1.0346, down 0.24 percent, as at 12.35 am ET.
On February 13, a survey by Westpac and Melbourne Institute showed that consumer sentiment in Australia rose 7.7 percent month-on-month in February, the biggest jump since September 2011.
The gain in February comes as the lower interest rates have started gaining more traction with the consumer. Between May and December in 2012, the central bank cut the cash rate four times, reducing the rate by 1.25 percentage points in total.
Earlier this week, a survey by National Australia Bank showed that an index of business confidence edged up to 3 in January from 2 in December. A separate survey by Roy Morgan Research revealed that business confidence in Australia in January increased by 7.7 points to 122.5 from December, the highest level since April 2011.
To contact the editor, e-mail:
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- China Military PLA Drills Affect Flights, Hundreds Cancelled
- Malaysia Airlines MH17: EU Feared Won't Ever Enforce Sanctions on Russia; All Talk, No Force
- U.S. Flights to Israel Now Lifted, Flights To and From Tel Aviv Resume – FAA
- Reserve Bank of New Zealand Raises Interest Rates Due to 'Unsustainable' Kiwi
- Embattled Malaysia Airlines Could Run Out of Cash 2015; Diverts Plane Over Another War Zone After MH17 Crash
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- HTC Google Nexus 8 Release Date Imminent with New Nexus 7 Deals, Two New Tablets Soon
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales