We’re close to entering our low inflation era, after a three-year rollercoaster of rapidly rising prices.
The latest monthly figures from the Australian Bureau of Statistics showed inflation was 3.4 per cent in the 12 months to February, for the third month in a row.
Food and drink prices have continued to fall.Credit: Luis Ascui
Inflation has been falling for more than a year now. So what’s particularly interesting about a third month in a row of no movement on that front?
Firstly, the monthly figures can be volatile and many economists had expected inflation to be slightly higher in February than in January.
Instead, it fell in some key categories such as food and non-alcoholic beverages. Price growth there slowed to 3.6 per cent in the year to February, down from 4.4 per cent in the year to January.
But it seemed even Taylor Swift’s massive Eras Tour couldn’t get Australians to spend enough to put greater upward pressure on prices.
This brings us to the second point: services inflation has continued to fall, including in holiday travel and accommodation. The surge in hotel bookings and flights to Sydney and Melbourne to see Swift were more than countered by a drop-off in other holiday bookings as school holidays ended.
Economists and the Reserve Bank have been watching services inflation particularly closely because while goods inflation has been falling as post-pandemic supply chain pressures ease, service inflation has proven much more sticky.
We’ve stopped splurging – but have we finally tamed inflation?
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28.03.2024
We’re close to entering our low inflation era, after a three-year rollercoaster of rapidly rising prices.
The latest monthly figures from the Australian Bureau of Statistics showed inflation was 3.4 per cent in the 12 months to February, for the third month in a row.
Food and drink prices have continued to fall.Credit: Luis Ascui
Inflation has been........
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