SYDNEY, June 2 (Reuters) - The Australian Bureau of Statistics (ABS) said on Friday a devastating cyclone that hit the country's north east in late-March will impact some components of inflation but the overall effect on the headline number is expected to be "negligible."
Tropical Cyclone Debbie barrelled into northern Queensland, causing widespread flooding in the coal-heavy region, disrupting rail haulage for several weeks, destroying crops and damaging some of Australia's most popular tourist destinations.
As a result, the A$1.7 trillion economy is likely to take a knock in the first half of 2017, with economists expecting growth to slow to 0.2 percent in the March quarter from 1.1 percent in the prior period. First-quarter data is due on June 7.
Economists were also expecting a small impact on inflation.
Australian consumer price inflation tiptoed atop 2 percent last quarter for the first time since 2014 although key measures of core inflation stayed stubbornly short of the Reserve Bank of Australia's (RBA) 2 to 3 percent target band. Cyclone Debbie will impact some components of the CPI, however the magnitude of the impact is expected to be small. The impact on the headline CPI is also expected to be negligible," the ABS said.
The ABS also expects the higher cost of insurance premiums from the cyclone to flow through to CPI over a number of quarters.