First Quarter CPI Data

Australia's core inflation rate remained stubbornly high in the March quarter but is unlikely to sway the central bank from any plans to continue easing monetary policy as it looks to head off the effects slowing global growth.

The Reserve Bank of Australia has previously flagged that it expects a decline in inflation over the longer-term notwithstanding some remnant price pressures in the system. However, while unlikely to change the central bank's current view on the need for some modest future rate cuts, the numbers may water down some near-term expectations the RBA will need to deal with the economic effects of deflation.

Australia's headline consumer price index rose 0.1% in the first quarter of 2009 from the fourth quarter of 2008 and rose 2.5% from a year earlier, the Australian Bureau of Statistics said. However, the RBA's weighted median CPI rose 1.2% in the first quarter from the fourth quarter and rose 4.4% from a year earlier, while trimmed mean CPI rose 1.0% in the first quarter from the fourth quarter and rose 3.9% from a year earlier. Economists had expected that an average of the RBA's two core measures of CPI rose 0.75% from the previous quarter and rose 3.85% from a year earlier.

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