There have been either sharp slowdowns in prices over the past 12 months or outright price drops across many goods and services as the combined impact of high interest rates and a growing tax take weigh on consumer spending.
Prices for meat and seafood,which a year ago were climbing at 5.1 per cent,have fallen by 2 per cent over the past 12 months. Gas prices were soaring by 27.1 per cent in January 2023 but have dropped 1.4 per cent.
Holiday travel and accommodation prices soared through 2022 as people,freed from the restraints of COVID,started travelling overseas and around the country. Inflation in this sector was at 17.8 per cent in January last year but is now at minus 7.1 per cent.
Across eight of the 11 broad sectors tracked by the bureau,prices were either flat or falling in January. The monthly measure has risen by 0.2 per cent for the past five consecutive months,a sign of subdued price growth.
The Reserve Bank closely watches measures of underlying inflation which exclude volatile items or one-off price changes. This measure dropped to 3.8 per cent in January,a 0.2 percentage point drop.
Moody’s Analytics economist Harry Murphy Cruise said the inflation figures meant the bank would soon begin to consider rate cuts,starting in September and with a follow-up in December.