Australia Producer Price Index (PPI) y/y reflects changes in the prices of goods and services produced in Australia in the reported quarter compared to the same quarter of the previous year. The index shows price changes from the producer perspective.
The evaluation accounts for the base price (the amount received by the producer for a product or service sold by the company, taking into account all discounts, before taxes and other payments). Proportional weights for each of the index components are fixed depending on their contribution to the general assessment. The list of products and the weights are updated periodically to ensure they remain representative of the activities of providers in the Australian economy.
The Producer Price Index (PPI) is a relative indicator. It reflects the change in prices in relation to the base year. The base year for the most price categories is set to the period of 2011/12 with some exceptions: the PPI for some of the groups of goods is calculated in relation to the period of 2012/2013 and 2015/2016. The index benchmark in the base year is set to 100. Thus, if the index value is 110 points, this means that prices have risen by 10% as compared to the base period.
The PPI reflects the output prices of goods and services and is therefore a leading indicator of consumer inflation. In turn, consumer inflation is an important factor influencing the development of the country's economic and financial system. Also, the Reserve Bank of Australia analyzes the behavior of inflationary indexes when adopting the interest rate decision.
Therefore, economists and analysts closely monitor the PPI dynamics in predicting the movement of Australian dollar quotes. The PPI growth is generally seen as positive for the Australian dollar.
The chart of the entire available history of the "Australia Producer Price Index (PPI) y/y" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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