12.9+Low+Inflation

The RBA's goal for low inflation is to achieve an inflation rate (the sustained increase in the general level of prices) to between 2 to 3%, on average, over the business cycle.

It would appear that we are well within the target.

Here are the latest figures:




 * DECEMBER KEY FIGURES**

||
 * [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || **Sep Qtr 2011 to Dec Qtr 2011** || **Dec Qtr 2010 to Dec Qtr 2011** ||
 * **Weighted average of eight capital cities** || % change || % change ||
 * **All groups CPI** || **0.0** || **3.1** ||
 * Food and non–alcoholic beverages || -1.5 || 2.5 ||
 * Alcohol and tobacco || 0.9 || 3.1 ||
 * Clothing and footwear || -0.5 || 2.6 ||
 * Housing || 0.4 || 4.0 ||
 * Furnishings, household equipment and services || 0.1 || 0.2 ||
 * Health || -1.2 || 3.6 ||
 * Transport || 0.0 || 4.0 ||
 * Communication || 1.1 || 1.6 ||
 * Recreation and culture || 0.8 || 0.5 ||
 * Education || 0.0 || 5.8 ||
 * Insurance and financial services || 0.6 || 5.6 ||
 * **CPI analytical series** || [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] ||
 * [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || All groups CPI, seasonally adjusted || 0.2 || 3.0 ||
 * [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || Trimmed mean || 0.6 || 2.6 ||
 * [[image:http://abs.gov.au/icons/ecblank.gif width="1" height="1"]] || Weighted median || 0.5 || 2.6 ||

This is why printing money doesn't work



What does the Governor of the RBA, Glenn Stevens have to say about the current rate of inflation?

CPI inflation has declined as expected and will fall further over the next quarter or two. In underlying terms, inflation is around 2½ per cent. Over the coming one to two years, and abstracting from the effects of the carbon price, the Bank expects inflation to be in the 2–3 per cent range. This forecast embodies an expectation that productivity growth will improve somewhat as a result of the structural change occurring in the economy.