Australian floods add to inflation

Farmlands flooded in South East Queensland. Photo / AP

Australia's devastating floods are expected to add a quarter of a percentage point to March quarter inflation, Treasurer Wayne Swan says. Swan said the disaster had wiped out a significant part of the country's food bowl, meaning prices would rise.

Swan said it was inevitable that fruit and vegetables would cost more for a while but the spike should be temporary.

Treasury estimated the disaster was likely to wipe half of a percentage point off Australia's gross domestic product in 2010-11, he said.