The cost of an Australian “barbie” eased quicker than inflation in the first three months of the year, suggesting households may be in slightly better shape than the Reserve Bank and Treasurer Jim Chalmers anticipated.
(Bloomberg) — The cost of an Australian “barbie” eased quicker than inflation in the first three months of the year, suggesting households may be in slightly better shape than the Reserve Bank and Treasurer Jim Chalmers anticipated.
Bloomberg’s Barbecue Index advanced 5.9% from a year earlier, slowing from 8.2% in the fourth quarter of last year. The result easily outpaced the Consumer Price Index’s 7% gain due to smaller price rises for seafood, pork and wine.
The cooling in food prices, which account for about 17% of the inflation basket, comes as the RBA raised interest rates by 3.5 percentage points between May and March. The central bank stood pat at 3.6% this month to assess the impact of its tightening and today’s data suggest a prolonged pause is in prospect.
The figures show “meat aisles are providing less ‘sticker shock’ for consumers,” said Michael Harvey, senior food retail analyst at Rabobank. “Deflation was actually evident in lamb – the only sub-category in food to record a decline in prices.”
The result will be welcomed by Treasurer Chalmers, who wants to provide targeted cost of living relief to households while restraining overall spending to avoid further fueling inflation in his budget due on May 9.
While the Barbecue Index has eased, at almost 6% it still suggests that the cost of food, a key component of household budgets, nonetheless remains elevated.
“Food prices are still high,” said Diana Mousina, deputy chief economist at AMP Capital Markets, who added that further relief is on the horizon. “Agricultural commodity prices have been falling on average over recent months which should feed through into lower food inflation.”
Australia boasts an enviable outdoor lifestyle, making grilled sausages, seafood and steak a key part of the nation’s culture. “Crocodile Dundee” star Paul Hogan enticed Americans to holiday Down Under four decades ago by offering to throw a “shrimp on the barbie” for them.
Bloomberg’s Barbecue Index crunches data from the Australian Bureau of Statistics, looking at the prices of key ingredients in the great Aussie barbecue — seafood, beef, lamb, wine, vegetables and cheese. It puts equal weighting on all of the components.
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