Aussie consumer prices hit record low in second quarter, outlook remains murky

The second quarter had seen Australian consumer prices dropping by a record. This could be attributed to the coronavirus crisis dragging child care cost and petroleum prices, inflicting a serious damage to years of growth toward higher inflation.

Last quarter, the consumer price index (CPI) recorded a 1.9% drop. This decline sent annual prices down 0.3%. This came to be the very first weak reading since 1998. Forecasts were also dim as the index is expected to drop 2.0% and 0.4% in this quarter and next.

This kept the Reserve Bank of Australia under pressure, which had only just managed to put inflation back into its 2-3% target bracket after years of negative readings. In addition to this, the country’s economic outlook remains discouraging as the threat of a recession impends.