Inflation continues to move in the right direction, ushering in the possibility of lower prices growth, wages growth and interest rates in the near future.
Annual inflation fell from 2.8% in the September 2024 quarter to 2.4% in the December quarter. That marked the seventh decline in eight quarters, since inflation peaked at 7.8% in December 2022, according to the Australian Bureau of Statistics.
However, it remains to be seen if inflation will remain within the 2-3% target range pursued by the Reserve Bank of Australia (RBA).
It’s possible inflation will rise again. During the RBA board’s monetary policy meeting in December, members noted “there was still excess demand in the Australian economy” and “persistently high services price inflation”, according to the minutes.
Conversely, it’s conceivable inflation will fall below the target range, due to a possible combination of even slower economic growth and rising unemployment, which would restrain wages growth and consumer spending.
For More Economic updates, stay tuned to CVG Finance Brokers
