Australia's Treasurer Seizes Election Opportunity: Core Inflation Drops

SYDNEY (Romero.my.id) - Australia's Treasurer, Jim Chalmers, indicated that the market could reasonably anticipate further reductions in interest rates following the deceleration of annual core inflation to its lowest point over the past three years. This development underscored the decrease just before a tightly-fought national election took place three days later.

The main trimmed mean measure of yearly inflation, which is the Reserve Bank of Australia’s favored indicator, decreased to 2.9% from 3.3%, according to the figures for the March quarter released by the Australian Bureau of Statistics on Wednesday.

For the first time since late 2021, the decrease brought inflation back within the central bank's targeted range of 2% to 3%. The yearly headline inflation remained unchanged at 2.4%, while quarter-on-quarter inflation climbed to 0.9%, slightly exceeding expectations of a 0.8% rise.

Chalmers informed a press briefing that the market strongly believes further interest rate reductions are imminent, and he doesn’t find any data in these figures significant enough to change those predictions.

Hitting the targeted range for core inflation is a significant achievement.

Currently, the market anticipates four to five interest rate reductions by year-end, totaling an ease of 117 basis points, with one expected reduction being a quarter-point decrease during the Reserve Bank of Australia’s upcoming policy gathering on May 20th. Before this new information was released, investors were pricing in about five decreases amounting to around 123 basis points of loosening.

Chalmers expressed optimism regarding the economy’s condition as the country geared up for a general election on Saturday. He belongs to the center-left Labor Party, which has been advocating its prudent approach to economic stewardship.

He stated that they had significantly reduced inflation, increased real wages, maintained low unemployment, decreased the national debt, and brought down interest rates "... despite all the challenges thrown at them by the global landscape."

I believe all Australians can take pride in the advancements we've achieved collectively.

(Reported by Christine Chen and Stella Qiu in Sydney; Edited by Jacqueline Wong and Sonali Paul)