According to data released by the Australian Bureau of Statistics (ABS),
inflation was reported to have increased by 1.3 per cent during the March
2008 quarter resulting in an annual inflation rate of 4.2 per cent.
The headline rate has now passed the upper limit of the Reserve Bank of
Australia's
(RBA) target and the RBA's preferred measure of inflation, the
underlying rate of inflation was also reported to have increased during
the March 2008 quarter.
Some analysts have already factored in a 25 basis point rise for May, others
believe the RBA may wait until August before putting rates up again if
inflation remains at the same level. Virtually everyone is agreed that the
possibility of interest rates being lowered has all but disappeared for the
next 12 months.
However Printing Industries national manager, policy and government
affairs, Hagop Tchamkertenian said the March quarter results should
not force the RBA to act by lifting official interest rates. He says, "In
the recent period we have seen signs that the current rate rises are starting
to have an impact on economic activity. The recent retail trade
data clearly shows a weakening trend".
Tchamkertenian said the RBA is likely to be unmoved by the March inflation
figure as it had already factored in such a result. "I do not believe
that today's inflation data has increased the prospects of another rate hike by
the Reserve Bank in May," he said.
"The Reserve Bank in its last statement on monetary
policy indicated that its monetary policy decisions combined with
increases in borrowing costs occurring independently of changes in the cash
rate is helping to moderate demand which will help take pressure off
inflation."
The underlying rate rose between 1.2 per cent and 1.3 per cent
implying that the RBA's preferred measure of inflation is now running at
a rate of between 4.1 per cent and 4.4 per cent.
The producer prices data shows that raw material prices in the
printing, publishing and recorded media sector fell by 0.5 per cent
during the quarter. During the year to March the outcome was a
decline of 1.7 per cent.
Output prices for the sector were reported to have risen by 0.7 per
cent during the March 2008 quarter and by a modest 0.2 per
cent during the 12 month period to March.
At a more disaggregated level, output prices for printing and
services to the printing sector rose by 0.8 per cent during the
quarter but fell by 1.5 per cent during the year to March.
In the publishing sector output prices rose by 0.6 per cent during
the quarter and increased by 1.4 per cent during the 12 months to March.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
