Australian monthly inflation dies

We know it’s not real because the RBA says so. But if I were less of an intellectual pygmy, I might conclude that Australian inflation peaked a months ago and continued to trend down in November with another donut on the Melbourne Institute survey. Year on year is now plunging at 1.6%:

Core inflation is running at a paltry 1.3%. The next few months of base effects are modest:

2/11/2017	2.7	0.2
3/12/2017	2.2	0.1
1/01/2018	2	0.1
1/02/2018	2.1	-0.1
1/03/2018	2.1	0.1
1/04/2018	2	0.5
1/05/2018	2.2	0
10/06/2018	2	0.2
1/07/2018	2	0.2
1/08/2018	2	0.2
1/09/2018	2.1	0.3
1/10/2018	1.9	0.1
1/11/2018	1.6	0

But with the economy choking on its own blood by April when the big 0.5% drops out, I would not be surprised to see monthly inflation sub-1% by then.

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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.