The December quarter CPI outcome continues the exceptionally good inflation performance of the past year.
The underlying rate of inflation was 0.3 per cent in the December quarter 1997, the same as in the previous two quarters, and was 1.4 per cent through-the-year to the December quarter. This through-the-year figure breaks the record set in the September quarter and is the lowest recorded since the series started in March 1972. The underlying rate of inflation has been below 2 per cent for the last six consecutive quarters.
The All groups CPI rose by 0.3 per cent in the December quarter 1997, following a fall of 0.4 per cent in the September quarter 1997. Through-the-year to the December quarter 1997, the All Groups CPI fell by 0.2 per cent.
Mortgage interest charges continued to fall in the December quarter - the sixth consecutive fall - and are now 32 per cent lower than two years ago.
Motor vehicle prices fell by 3.2 per cent in the December quarter, the largest fall since the December quarter 1978, to be 6.8 per cent lower than in the December quarter 1996. For imported items as a group, prices fell by 1.1 per cent in the quarter.
Low inflation is a key to ensuring that the economy can grow strongly on a sustainable basis. Over the past year, continued competitive pressures in the economy have helped maintain the general improvement in underlying inflation.
These results show that Australia is firmly entrenched among the ranks of the world's low inflation economies.