Free Trial

MNI: Australia ABS Plans Monthly CPI But Could Take Upto 2 Yrs

By Sophia Rodrigues
     SYDNEY (MNI) - The Australian Bureau of Statistics has begun development
work on publishing a monthly consumer price index, a key monthly statistic
keenly sought by the Reserve Bank of Australia, but the first publication is
expected to take at least two years.
     In a media release published Wednesday, the ABS said it has recently begun
work to determine the feasibility of producing a monthly CPI to meet the demand
for this key indicator to be published on a monthly basis, rather than
quarterly. 
     Back in 2010, a major review by the ABS had found the need for this monthly
indicator but the additional funding required to meet the costs was a key reason
why it never materialized. Over the past few years, however, the expected cost
to produce a monthly CPI has significantly reduced from A$15 million estimated
in 2010, and is one of the reasons why the ABS is now pursuing this.
     However, the first publication could take at least two years because the
ABS estimates the development phase of the project to take around 12 months, and
an additional period of 12 months where the monthly price collection is
implemented. 
     "This enables sufficient time to imbed the monthly collection and conduct a
parallel run with the quarterly CPI. It will then ensure that when the monthly
CPI is first published, an annual movement will also be available," a paper
issued by the ABS said.
     The RBA has long advocated for a monthly CPI. In a speech in October 2017,
Deputy Governor Guy Debelle elaborated on this when he said that in the case of
inflation, a more frequent estimate would help to identify changes in the trend
in inflation sooner.
     He admitted that it might probably come with more noise, but the RBA has
ways to deal with that. 
     "At the moment, we need to wait three more months to gain a better
understanding as to whether any particular read on inflation is signalling a
possible change in trend or is just noise. That is one of the reasons why the
RBA has long advocated a shift to monthly calculation of the CPI," he said.
     The ABS' plan is to issue monthly CPI and also continue with the quarterly
release. Not all quarterly data will be included in the monthly release but the
ABS intends to publish important analytical series like seasonally adjusted CPI,
trimmed mean, weighted median, tradables, non-tradables, goods, services, CPI
including deposit and loan facilities, CPI excluding volatile items and various
CPI excluding measures.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: M$A$$$,M$L$$$,MT$$$$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.