NO.089

CONSUMER PRICE INDEX – SEPTEMBER QUARTER 2003

Today’s Consumer Price Index (CPI) shows that inflation remains moderate,

with the All Groups CPI increasing by 0.6 per cent in the September quarter

2003 and by 2.6 per cent over the year, within the medium-term inflation

target band.

Higher world crude oil prices led to a 3.0 per cent rise in domestic

petrol prices in the September quarter, adding 0.1 of a percentage point

to the overall increase in the CPI. Housing costs also rose in the September

quarter, with ongoing high levels of activity in the construction sector

underpinning a 1.7 per cent increase in house purchase prices. Seasonal

increases were also recorded for property rates, utilities prices, and

rents.

Australian households benefited from price declines across a range of

items in the September quarter, including vegetables (down 7.8 per cent),

audio visual and computing equipment (down 7.3 per cent), pharmaceuticals

(down 3.6 per cent), and motor vehicles (down 0.5 per cent).

The removal of the temporary Ansett Levy from 1 July 2003 also

contributed to a 1.8 per cent fall in the price of holiday

travel and accommodation.

Looking forward, the key medium-term influences on inflation point to

continued moderate price pressures in the period ahead. In particular,

wages growth remains steady and pressures from other business input costs

have been low over recent quarters. In addition, the recent appreciation

of the Australian dollar should see lower prices for imported consumables.

These conditions are consistent with the Government’s forecasts that

inflation will remain within the medium-term inflation target band in

the coming year.

Today’s data confirm that the Australian economy continues to enjoy a

healthy combination of solid growth, low unemployment and moderate inflation.

CANBERRA

22 October 2003

Contact: David Alexander

(02) 6277 734