Australian producer prices rose by 0.8 percent in the second quarter, signifying a subdued inflation increase in the near term and no need to raise benchmark cash rates.

Although the index of Australia producer prices at its final stage has beaten forecasts, economists and analysts are still optimistic it is still not enough to push interest rates in August.

The Australian Bureau of Statistics said the index measures prices of capital and consumer items to final buyers. The rise in the index in the second quarter was due to building construction, petroleum refining, and other agriculture.

The bureau also published indices measuring prices of goods and services at a preliminary and intermediate stage of the production cycle.

The stage one or preliminary price index, which covers inputs into the production of intermediate commodities, rose 2.8 per cent in the second quarter from the first, and increased 6.8 per cent from a year earlier, the ABS statement said.

According to the Australian, a survey of 18 economists by Dow Jones Newswires showed an expected rise in core inflation of just 0.7 percent in the second quarter from the first, taking the annual rise in the core rate to 2.5 percent, the mid-point of the Reserve Bank of Australia's 2-3 per cent inflation target band. Core inflation is central to policy-making at the RBA as it strips out volatile quarterly price movements, instead highlighting longer-term trends in price pressures.

Economists said that given the backdrop of a high Australian dollar and weakening demand in key sectors of the economy such as retail sales, building activity, tourism and education services, core inflation will need to be substantially higher than forecast to justify a hike.

"Only a very high outcome of, say, above 1 per cent could seriously put a near-term rate rise back on the agenda," said Alan Oster, chief economist at National Australia Bank in the Dow Jones report.

The survey forecast headline inflation will be a rise of 0.8 percent from the first quarter, taking annual inflation to 3.5 percent.

The RBA's own comments on inflation and interest rates have been tempered over the last month. In a statement last week, it dropped a long-repeated reference to the need to raise interest rates "at some point".