Inflation misses forecasts in March quarter

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.