14 Apr 2009

CPI expected to rise 0.3%

6:49 am on 14 April 2009

A fall in fuel costs is expected to drive further fall in inflation, when Consumer Price Index for the March quarter is issued on Friday.

Most economists expect the CPI to increase by 0.3% for the first three months of the year.

That would see the annual rate fall from 3.4% to 3%, putting inflation at the top of the Reserve Bank's target band.

Westpac chief economist Brendan O'Donovan expects decreases in fuel prices and airfares, to offset higher food and electricity costs.

He says inflation is disappearing extremely quickly and describes it as "yesterday's issue" in the current global economic climate.

The food price index for the month of March is also due on Friday.