In good news for businesses, inflation is continuing to decline – and, in some cases, prices are actually going backwards.
The annual inflation rate fell to 4.9% in July, compared to 5.4% in June and 8.4% in December (see graph), according to the Australian Bureau of Statistics. That means prices throughout the economy as a whole are continuing to increase, but at a decreasing rate.
But not all prices. Over the year to July, prices fell 7.6% in the automotive fuel category and 5.4% in the fruit & vegetables category. And prices barely moved for transport (up 0.3%) and garments (up 0.4%).
Conversely, there were big price increases for electricity (up 15.7%), gas & other household fuels (up 13.9%) and dairy & related products (up 12.7%).
From a business perspective, a lower inflation rate means a reduction in the growth of input costs and less pressure from employees for wage rises.
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