Australian consumer prices fell in the fourth quarter given the sliding prices for fuel, cars and food. Economists expect the central bank to cut interest rates as the economic growth stagnates.
The consumer price index fell by 0.3 per cent in the final three months of 2008, making it the slowest quarter in nearly 11 years, according to the Australian Bureau of Statistics.
“The most significant price falls this quarter were for automotive fuel (-18.2%), motor vehicles (-2.4%), deposit and loan facilities (-1.9%) and pharmaceuticals (-4.7%).”
“The contribution of automotive fuel fell 1.47 index points, providing a negative impact on the December quarter 2008 CPI movement, compared to a rise of 0.16 index points in the September quarter 2008.”
“The most significant offsetting price increases were for rents (+1.8%), fruit (+8.0%), tobacco (+1.7%) and take away and fast foods (+1.5%).”
The risk that the Australian economy will contract this through 2009 is high.
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