Australian grocery prices in free fall, says government

Posted by AFN Staff Writers on 26th July 2012

The Australian Bureau of Statistics has reported that grocery prices have fallen over the past year as household staples such as fruit, vegetables and bread have all gotten cheaper.

The Bureau of Statistics says the price of cheese has slipped 1.9 per cent in the past year, meat and seafood 2.1 per cent.

The annual consumer price index (CPI) released on Wednesday shows that the annual inflation rate has fallen to 1.2 per cent, the lowest level in over a decade.

Federal Treasurer Mr Wayne Swan said that the inflation figures were a remarkable achievement, showing that Australia’s economic fundamentals are ‘rock solid.’

“These figures today give Australians reason to be optimistic, and Australians the reason to reject the doomsayers that constantly talk our economy down,” Mr Swan said.

The drop in grocery prices will go only some way however to countering rises in household bills such as water, up 13.4 per cent, and electricity, up 8.4 per cent.

Speculation over whether the drop in inflation would fuel further rates cuts followed the announcement but Treasurer Swan refused to join the discussion, saying the Reserve Bank of Australia made its decisions independently of government.

The speculations on the price drops have included the fact that there have been bumper crops and good rainfalls over the past year.