Data included in this section are sourced from Australian Bureau of Statistics publications.

Inflation.

Headline inflation (CPI) for the year to 30 March 2004 was 2.4%, well within the Reserve Bank's tolerance range. The stronger Australian dollar helped contain imported inflation, sufficient to offset domestic increases due in large part to rises in housing, medical, education, and some fresh food item costs. Interest rates were also steady; accordingly inflation eased during the past twelve months.

While increasing housing costs may not be as large a contributing factor to inflation in the near term this could be replaced by rising interest rates. A falling Australian dollar would also remove some of the buffer against imported inflation. Higher fuel prices, possibly due to continuing political instability in major oil producing regions, and increased demand for oil should worldwide economic activity accelerate would also be a significant factor contributing to an increase in Australian inflation.

Salaries and wages are currently rising by more than 4% per annum and average weekly earning rose in excess of 5% for the year to November 2003. Wage increases of this magnitude maintain upward pressure on current inflation levels, also, business is nearing the limit to which it can absorb costs and increasingly will have to pass these on to consumers.

Australian headline inflation (CPI)

Changes in CPI by Capital City

Copyright (C) 2004 National Remuneration Centre