What drives Australian inflation? You guessed it…
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Australia’s primary inflation driver is always non-tradable:
And guess what drives it? From Westpac:
Non-tradable inflation has been killed by the high dollar. And with income growth still falling, the residential construction boom about to flood the market with supply killing rents, then the construction boom itself set to roll over by year end killing construction costs, and all the while house prices slowing and stalling, where do you think this chart is going next?
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.