Slipping Inflation Rate May Prompt Cuts

More interest rate cuts may be made by the Reserve Bank following the slip of inflation rates to its lowest point at 1.2 percent.

According to reports from the Bureau of Statistics, the prices of basic goods like fruits, vegetables and bread, may have had dramatic slides and are now cheaper than two years ago utilities and important expenses like rent (4.4 percent), gas (8 percent), water (9.3 percent) and electricity (10.7 percent) have increased sharply. The price of childcare also rose to a steep 9.8%.

Imported goods have prices slipping at 2 percent in the last year while local or home products are climbing at 3.3 percent.

Prices for homes among middle class, whose house values fall between $600,000 and $1 million, increased to 4.5 percent in the first half of this year. The Reserve Bank said that this could still get worst.

Joe Hockey from the Treasurer’s office said that the prices of fast-rising commodities were actually those that many Australians do not like paying, such as water rates and electricity.

Treasurer Wayne Swan, meanwhile, issued a statement directed at doomsayers. He said that it is rare in Australia’s economic history have low unemployment rates, a huge investment in the pipeline, contained inflation, and healthy consumption happening all at the same time.

Swan added that while these are good news, some take advantage of taking an alarmist approach who wants to cast gloom and doom over the economy.