The Reserve Bank is pushing for more frequent inflation data from the Australian Bureau of Statistics, with quarterly updates currently restricting the RBA’s ability to tackle surging cost-of-living pressures.
World bankers this month laughed at Governor Phillip Lowe during a financial forum in Switzerland when the RBA chief lamented that his team doesn’t receive monthly statistics like central banks in Europe and the US.
The RBA pushes the ABS for more frequent data amid significant inflationary pressure.
Quarterly data currently restricts the RBA’s ability to apply monetary policy because it is not up-to-date with the latest figures during monthly meetings.
Delayed consumer price index (CPI) data has been exacerbated by difficult economic conditions in 2022, with costs for goods and services like fuel and lettuce skyrocketing.
Inflation rose a further 2.1 percent in the March quarter, making for a 5.1 percent hike over the 12 months prior.
The RBA’s inflation target is 2 percent to 3 percent.
Speaking at a world economic panel discussion in Zurich on Friday, Mr. Lowe – much to the amusement of his central banker counterparts – conceded that delayed inflation data was holding back the RBA’s ability to make monetary decisions.
“The other thing that’s different – and this is a bad difference – is our CPI is only available quarterly,” he lamented.
“Yes, you laugh as well.”
Camera IconThe need for more speedy inflation data has been made more relevant by ballooning costs for goods such as fuel. Richard Gosling Credit: News Corp Australia
Mr. Lowe revealed the RBA was working with the ABS to develop a more efficient system.
“We’ve been working with the Bureau of Statistics to try and get a monthly CPI, and maybe later this year, they will have an experimental series, but we only have one reading on inflation every three months,” he said.
When contacted by NCA NewsWire, the ABS said producing monthly figures had been too costly.
But a new data-source system has recently reduced costs, leading to hopes a more frequent CPI indication could be developed by the end of the year.
“The ABS recognizes increasing interest in understanding cost-of-living pressures and the implications for monetary and fiscal policy,” a spokesperson said.
Camera IconThe ABS admits quarterly data isn’t ideal with cost-of-living pressure mounting. NCA NewsWire / Damian Shaw Credit: News Corp Australia
“Until recently, the monthly CPI costs have been prohibitive. They are using new data sources to make the CPI has reduced data collection costs, enabling the possibility of creating a more frequent measure of inflation.
“Using scanner data and web-scraping (automated) data collection techniques provides high-frequency data at a lower cost.”
The statistics bureau said work on providing monthly data was progressing well. However, it would likely include only a partial measurement of the costs of goods and services rather than the wider basket calculated in the quarterly CPI.
“Work is progressing well to develop a partial monthly CPI indicator, and the ABS is planning to publish the work and methodology in an information paper in August 2022,” a spokesperson said.
“The monthly CPI indicator being explored by the ABS can be considered a partial measure of the quarterly CPI, as not everything included in the CPI basket will be measured every month.”