Australian consumers expect inflation to fall: survey

13:23, December 16, 2010      

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Australia's consumers expect inflation to fall in the next 12 months, a survey by Melbourne Institute (MI) of Applied Economic and Social Research showed on Thursday.

The median expected inflation rate, reported in the Melbourne Institute Survey of Consumer Inflationary Expectations, decreased to 2.8 percent in December from 3.1 percent in November, and this was the second consecutive monthly fall.

MI research fellow Michael Chua said the central bank's increase in the cash rate on November 2 continued to rein in inflationary expectations.

"Nevertheless, the median consumer inflationary expectations in December remains on the high side," Chua said.

The MI survey showed the proportion of survey respondents expecting annual inflation to fall within the Reserve Bank's target band of 2 percent to 3 percent increased to 15.6 percent in December, from 13.9 percent the month before.

The proportion expecting prices to rise was 75.8 percent in the December survey, from 74.8 percent in November, while those expecting price decreases was 2.6 percent, compared with 3.3 percent a month earlier.

The median expected inflation rate of managers and professionals fell to 3.1 percent in December, from 3.4 percent in November.

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