Inflation figures out after Easter
AUSTRALIA’S inflation figures will be released this week and the data could help decide whether the Reserve Bank will slash interest rates later this year.
With only three days of trading in the country because of Easter and ANZAC Day public holidays economists are expecting the main focus to be on the figures released tomorrow.
“The headline inflation number being flat and the March quarter was affected by a sharp fall in petrol prices which has since rebounded,” AMP Capital’s chief economist Shane Oliver said.
He said the annual rate of inflation would be around 1.3 per cent, dropping down from 1.8 per cent, which was a “pretty weak outcome” in terms of inflation. The figures could help decide whether the Reserve Bank of Australia would cut interest rates.
The AMP economist predicted the bank probably would cut rates but not next month considering there was a federal election that had yet to be decided.
Mr James said potential cuts were more likely to be in June, July or August.
“It could come a little later than that, if the reserve decides to wait and see on the election outcome, and see much extra stimulus is put into the economy,” he said.
He said there would likely be two rate cuts this year, but when they would happen was a mystery.