When the head of Australia’s central bank announced that he must wait three months for inflation figures, other international bankers in Switzerland scoffed at him.
At a conference sponsored by the Swiss bank UBS in Zurich, Reserve Bank governor Philip Lowe voiced his displeasure with Australia’s official consumer price index data collecting.
Our CPI is only available quarterly, which is another difference that isn’t good, according to Dr. Lowe.
“Yes, you laugh too.”
No, we’ve been trying to work with the Bureau of Statistics to acquire a monthly CPI, and perhaps later this year they’ll have an experimental series, but for now we only get one reading on inflation every three months.
While the United States, United Kingdom, European Union, and Canada disclose their consumer price index information every month, Australia and New Zealand continue to only provide inflation data on a quarterly basis.
Australia’s next inflation data, for the June quarter, won’t be available until July 27, which might put the nation’s top financial leaders in a precarious position when tackling rising prices.
Three weeks following the RBA’s next board meeting on July 5, the Australian Bureau of Statistics would disclose its data.
After the half-point hike in June, Dr. Lowe suggested that another increase of 0.5 percentage points was likely to occur the following month.
We talked about 25 basis points or 50 basis points, if you read the minutes of our prior meeting, he remarked.
I don’t want to predict the next meeting, but I believe the topic will come up again in the next one—either 25 or 50 times.
On April 27, Australia’s March quarter inflation data was revealed, and the results showed a 5.1% increase, the fastest since 2001.
Less than a week later, the RBA raised interest rates for the first time since November 2010, ending the period of the record-low 0.1 percent cash rate with a 0.25 percentage point increase in May.
With a 3.65% cash rate anticipated by March 2023, based on nine rate increases from the current 0.85% level, the lengthy intervals between inflation reports significantly exacerbate financial market speculation.
Monthly inflation data was previously unaffordable to compile, according to a representative for the Australian Bureau of Statistics.
She told Daily Mail Australia, “The ABS recognizes there is growing interest in understanding cost of living pressures and the implications for monetary and fiscal policy.”
Until recently, creating a monthly CPI was prohibitively expensive.
The ABS revealed in March that it was looking into developing a monthly inflation series that would cover important everyday products in addition to the existing quarterly series that dates back to 1949.
Scanner and automated data, according to the spokeswoman, might deliver “high frequency data at a lesser cost.”
Dr. Lowe recently revealed to departing ABC 7.30 host Leigh Sales By the end of 2022, Australia’s inflation rate is predicted to reach 7%, which would be a level last seen in 1990.
May saw the highest rate of American inflation since 1981 at 8.6%.
The corresponding CPI for Canada increased to 7.7% last month, the highest level since 1983.
The UK’s May inflation rate of 9.1% was the highest since 1982, while the Eurozone’s inflation rate this month reached 8.1 percent.
The ABS started collecting unemployment statistics monthly in 1978 after previously collecting it every three months.
Even if inflation in mid-2021 surged beyond the RBA’s 2 to 3 percent target, Dr. Lowe, who earns $1.076 million annually, vowed repeatedly last year to maintain the cash rate on hold at a record-low of 0.1 until 2024 “at the earliest.”
Even though the ABS reported on July 28 of last year that annual inflation in the June quarter of 2021 had increased to 3.8%, up significantly from 1.1% in the March quarter of 2021, the RBA announced in August 2021 that it would not raise the cash rate until 2024.
In that monthly report, Dr. Lowe stated, “The Board will not raise the cash rate until actual inflation is persistently within the 2 to 3 percent target range.”
The main economic forecast is that this criteria won’t be reached until 2024.