Australian Inflation Rate Soars – Forbes Advisor Australia

Australia’s rate of inflation, or CPI, rose 1.8% in the last quarter and 7.3% year-on-year, surpassing June’s figure as the highest ever. until 1990.

The ABS released its quarterly inflation figures a day after Treasurer Jim Chalmers warned in his first Budget that Australians would face short-term inflationary pressures. The last inflation update was in July, when the inflation rate rose 6.1%.

From September 29, the ABS will release inflation data monthly, instead of quarterly, to give economists and policymakers the most accurate view of the economy. However, the quarterly numbers remain the most comprehensive measure of inflation as the new monthly data update covers up to 70% inflation in goods. and services, while the quarterly figures provide a comprehensive picture of the cost of living in Australia.

Using quarterly figures, the ABS noted that the biggest increases in costs were new home purchases by homeowners (+3.7%), gas and other household fuels ( +10.9%) and furniture (+6.6%).

There was also an increase in commodity prices, with all food and non-food items increasing in September. In the 12 months to September, fruit and vegetable prices rose 16.2% and dairy products rose 12.1%, the report said. The recent flooding in Victoria is expected to increase inflationary pressure.

But for the first time in two years, Australian motorists will see relief as fuel prices have fallen.

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“Oil prices fell -4.3% in September as global oil prices eased,” the ABS said.

“Yearly activity in the September quarter remains higher at 18%, however, it is down from the March 2022 peak of 35.1%”,

The ABS noted that oil prices will rise again in December due to the restoration of oil prices.

No city is immune to inflation either. Looking at all inflation groups, the ABS noted that CPI rose across eight major cities, from 1.6% in Sydney and Canberra to 2.1% in Adelaide, Brisbane and Darwin.

Related: The bad news about the budget? Australians will feel the pinch for a while

Will the budget add to the cost of living?

Last night, Jim Chalmers presented his first Labor Budget since taking over as Australia’s treasurer in May.

It was also the first Labor budget in a decade, which Chalmers said would deliver “responsible, impartial cost-of-living relief – to make life easier for Australians, not will cause inflation”.

He also said that “Australians know that there is a complex combination at home and abroad that is driving up the cost of living”.

“They know the government can’t make the cost of living disappear overnight.”

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Five cost-cutting budget plans include:

  • More affordable childcare;
  • Extension of Paid Parental Leave;
  • Cheaper medicine;
  • cheaper housing;
  • And the salary is going again.

“This is a $7.5 billion package that helps put money back in people’s pockets, boost productivity and grow the economy—but it’s well-targeted and well-planned, to avoid additional pressures.” to inflation,” Chalmers reiterated in his Budget speech. .

The Central Bank is also working to reduce inflation, raising interest rates for six months in a row. As of October, the interest rate is 2.6%.

Speaking to Forbes Advisor earlier this month, Alexis Gray, Senior Economist for Asia Pacific at Vanguard, explained that rising employment rates will hold back inflation. -lifestyle because it affects all Australians, and sends a signal to be more careful about spending money.

“Interest rates affect all lending across the economy, whether it’s a mortgage or a business loan. A higher rate makes it more expensive for you to service the loan, and therefore makes you cut back in other areas,” Gray said.

It remains to be seen whether this increase will lower the cost of living in the coming months, as the downward trend is not expected until 2023.

Related: Why is inflation so high in Australia?

Estimated inflation rate

According to Australia’s leading economists and the Central Bank itself, inflation is expected to rise before the end of the year–and to continue until 2023 before falling back to target. (between 2-3%) by 2024 approx.

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The inflation rate at the end of 2022

CPI increases this year will continue further, with the Reserve Bank of Australia expecting inflation to reach 7.75% by the end of 2022.

Inflation rate in Australia in 2023

Next year should mark the beginning of interest rate cuts, the Treasury expects. In a statement in July, Chalmers said it expected inflation to fall to 5.5% in mid-2023, and should fall to 3.5% by the end of 2023.

FAQs

What is the inflation rate in Australia?

The annual inflation rate in Australia is 7.3%.

When is Australia’s next inflation number?

What is causing inflation in Australia?

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