The RBA needs to wake up after snoozing in 2014 Australia's inflation rate is on the cusp of falling to levels rarely, if ever, seen over the last 50 years...

Stephen Koukoulas

Market Economics Pty Ltd

The RBA needs to wake up after snoozing in 2014 Australia's inflation rate is on the cusp of falling to levels rarely, if ever, seen over the last 50 years as the mix of weak domestic growth, record low wages increases, global economic dislocation and collapsing national income all bite. The ever-reliable TD-MI monthly inflation gauge confirmed that consumer prices were flat in December which saw the through the year increase plummet to 1.5 per cent. More extraordinary is the loss of inflation momentum. In the past 7 months, inflation has been just 0.4 per cent, which annualises to 0.7 per cent. This is extraordinarily low, even if a few tenths of weakness is due to the fall in petrol prices. It is also extraordinary given the 25 per cent fall in the Australian dollar which clearly is not being passed on to consumers due to moribund demand and dreadfully low wage gains. The RBA fell asleep during 2014.... For more click on (VIEW LINK)


Stephen Koukoulas
Chief Economist
Market Economics Pty Ltd

Stephen Koukoulas has a rare and specialised professional experience over more than 25 years as an economist in government, as Global Head of economic and market research, a Chief Economist for two major banks and as economic advisor to the Prime...

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