Inflation lifted into COVID-19 lockdown. Deflation to follow

The Australian Bureau of Statistics (ABS) has released the Consumer Price Index (CPI) data for the March quarter 0f 2020 which registered rising underlying inflation.

According to the ABS, headline CPI rose by only 0.3% in the March quarter with annual growth rising to 2.2%:

Looking at the major components, you can see that quarterly lift in CPI was driven by Education and Food & Beverages, which surged by 2.6% and 1.9% respectively, whereas Transport (-1.9%) and Recreation & Culture (-1.7%) registered the biggest falls:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.