Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled papers for 12th Assembly 2012 - 2016; Tabled papers; ParliamentNT
Tabled by David Tollner
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
Department of the Treasury and Finance
Prices 73 Northern Territory Economy in the recreation and culture category, audio, visual and computing equipment is the main tradeable component and domestic holiday travel and accommodation is the main non-tradeable component; and the alcohol and tobacco category has a large tradeable component comprising spirits, wine and tobacco; however, beer constitutes a sizeable non-tradeable component in this category. The two speed nature of inflation was evident in Darwin over 2012. In 2012, the prices of tradeable goods in the Darwin CPI declined by 0.2percent in annual terms, whereas prices for the non-tradeablesectors increased by 4.2percent, which was substantially above the overall rate of inflation (2.5percent in 2012) (Chart 6.3). Source: ABS Cat. No. 6401.0 Exchange Rates and Commodity Prices The exchange rate of the Australian dollar versus other currencies influences inflation through changes in import prices, which, in a competitive market, influences the price of comparable domestically produced goods. Demand for the Australian dollar internationally is driven by: the difference between domestic and international interest rates; international demand for Australian goods and services, resource commodities in particular; relative levels of risk and uncertainty in the global versus Australian financial sectors; and expectations about the future growth of the global and Australian economies. The Australian dollar appreciated against all its major trading currencies in 2012 (Chart 6.4). The trade weighted index (TWI), a weighted average exchange rate where the weight of a foreign currency reflects the importance of that country in Australias trade, increased by 1.7percent in 2012. The Australian dollar depreciated by 4.2percent against the UnitedStates dollar over the first half of 2012 before rebounding by 6.8percent in the second half of the year, due to fluctuating sentiment driven by concerns about growth in the global economy and the expected demand for commodities. The Australian dollar appreciated marginally -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 00 01 02 03 04 05 06 07 08 09 10 11 12 Tradables % Non-tradables Calender year Chart 6.3: Tradable Versus NonTradable Inflation in the Darwin CPI (annual percentage change) Exchange Rates
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