The price fall coincides with substantial harvests of fruit and vegetables that followed strong rainfalls during the prime growing season around most of Australia. The high Australian dollar also resulted in loss of some export markets resulting in downward price pressures on local growers through over-supply in the Australian domestic markets.
A spokesperson for the ABS said that “[t]he Consumer Price Index (CPI) rose 0.2 per cent in the December quarter 2012, compared with a rise of 1.4 per cent in the September quarter 2012.
“The most significant price rises in the December quarter 2012 were for domestic holiday travel and accommodation (+6.2 per cent), automotive fuel (+2.6 per cent) and rents (+0.8 per cent). The most significant offsetting price falls were for vegetables (–5.7 per cent), audio, visual and computing equipment (–4.3 per cent) and pharmaceutical products (–3.5 per cent).
“The CPI rose 2.2 per cent through the year to the December quarter 2012, compared with a rise of 2.0 per cent through the year to the September quarter 2012”.
However the near static CPI and lowering of prices for vegetables has not improved consumer confidence.
The Westpac Melbourne Institute Index of Consumer Sentiment, published on 16 January 2013, showed that the Index rose by only 0.6% in the latest figures.
Westpac’s Chief Economist, Bill Evans, said that “it remains disappointing that despite a total of 175bp’s of [interest] rate cuts from the Reserve Bank since October 2011 the Index is only 3.5% above its level at that time”.
