Inflation misses forecasts in March quarter

Australian Bureau of Statistics data shows the consumer price index is still within the Reserve Bank's target range.

The price of Australian consumer goods and services missed forecasts in the March quarter, staying within the Reserve Bank of Australia's target band of 2 to 3% annual inflation.

The consumer price index (CPI) data from the Australian Bureau of Statistics -- the key measure of inflation -- lifted by 0.6% in the three months to March 31, bringing the annual rate to 2.9%.

An AAP survey of 12 economists had forecast CPI would rise by 0.8% for the period, for an annual rate of 3.2%.

Inflation came in higher than expected in the December quarter, at 0.8%, with an annual rate of  2.7%.

Inflation on tradable goods rose by 0.4% in the March quarter, to be 2.6% higher over the year.

By comparison, inflation on non-tradable goods rose by 0.7% in the quarter and 3.1% over the year, still slightly above the RBA’s preferred band after annual growth hit 4.3% in the June 2013 quarter.

The Australian dollar's continued rise over recent months will begin to offset some of the recent strength in tradables inflation.