Fed: Costello says no undue inflationary, deflationary pressures

AAP General News (Australia)
04-24-2001
Fed: Costello says no undue inflationary, deflationary pressures

CANBERRA, April 24 AAP - Treasurer Peter Costello said today's inflation figures showed
that there were few inflationary or deflationary pressures in the economy.

"You see one-off seasonal factors coming into play in this quarter, in particular floods
which have affected fruit and vegetable prices, and some international developments which
have affected meat prices," he said.

"When you look through those factors, because they will unwind, you see a consumer
price index which is moving by about 0.6 [per cent], which is about the middle of the
range.

"You don't see any undue inflationary pressures, but by the same token, you don't see
any great deflationary pressures.

"That's quite a healthy tick-over, 0.6 per cent, and quite consistent with our target
of 2-3 per cent."

The treasurer said the inflation figures did not suggest that retailers were raising
prices to make up margins eroded by the GST and the falling currency.

Mr Costello told reporters that there were one-off factors responsible for many of
the price rises, while others actually fell.

"If you actually break it down, it's hard to find any evidence in these figures that
people were trying to make up margins in the March quarter.

"If you look through them, there were changes in alcohol and tobacco [that were] mainly
health-related.

"[There were] some changes in relation to hospital and medical services, [but it's]
hard to think anybody was making up margins there.

"Clothing and footwear actually fell. It was one of the areas where you might have
expected margins to have been made up, but it doesn't appear that there was anything going
on there."

Rises in education costs were seasonal, he said.

AAP jph/jas/sb

KEYWORD: CPI COSTELLO

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