Australia, April 22 – Australia’s annual inflation rate slowed in the first quarter during the country’s first recession in almost two decades. It is currently at its weakest pace in the last 18 months.

According the Bureau of Statistics, consumer price index increased 2.5 percent from last year’s numbers. Meanwhile, financial services costs are down by 14.1 percent in the first quarter and gasoline declined 8.1 percent. Drugs, on the other hand, are up 13 percent and rents rose by 1.7 percent.

“Inflation is within the central bank’s target for the first time in 15 months because of the deterioration in the global economy,” said Savanth Sebastian, an economist at Commonwealth Bank of Australia in Sydney.

The recession is showing signs of worsening with the Australian dollar trading in at 70.64 U.S. cents at noon in Sydney from 70.66 cents before that. The two-year government bond yield fell 2 basis points, or 0.02 percentage point, to 3.24 percent.

The unemployment rate is up in March to 5.7 percent from 5.2 percent. The nation’s largest carrier Qantas Airways plans to cut 1,750 jobs as demand for travel plunges.
Even Prime Minister Kevin Rudd said last week that recession is inevitable.

Source:
bloomberg.com