Inflation in Australia Rises 5.2 Percent

A customer looks at the price of limes at a fruit stand in the central business district in Sydney, Australia, on Aug. 16, 2022. (Lisa Maree Williams/Getty Images)

Inflation in Australia has risen more than 5 percent in the past year, Australian Bureau of Statistics (ABS) stats show.

The monthly Consumer Price Index (CPI) leaped 5.2 percent in the 12 months up to August 2023.

ABS head of prices statistics, Michelle Marquardt, explained the increase was up from July, but still below the peak in December 2022.

“This month’s annual increase of 5.2 percent is up from 4.9 percent in July. Annual inflation remains below the peak of 8.4 percent in December 2022,” she said.

Housing jumped 6.6 percent, transport lifted 7.4 percent, insurance and financial services soared 8.8 percent, and food and non-alcoholic drinks rose 4.4 percent.

Fuel prices also rose 13.9 percent compared to the same time last year. In August alone, the cost of fuel lifted 9.1 percent.

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Ms. Marquardt explained the movement for automotive fuel “remains volatile,” but partially reflects the 11.5 percent fall in fuel prices in August 2022.

“Price rises this month, combined with base effects, have seen the annual movement for Automotive fuel increase 13.9 percent in August, compared to a fall of 7.6 percent in July,” she said.

Electricity prices have risen 12.7 percent in the last year, while gas prices have jumped 12.9 percent.

Holiday travel costs have also risen 6.6 percent compared to the same time a year ago.

Monthly CPI (inflation) data - (ABS image/Media Release)

The inflation increase is in line with market expectations of 5.2 percent year on year.

The Australian share market is in the red today, with the benchmark S&P/ASX 200 down 0.32 percent to 7,015.70 points at the time of writing.

Consumer Confidence Sliding

Meanwhile, ANZ-Roy Morgan data released yesterday revealed “weekly inflation expectations” among Australians had lifted to 5.4 percent.

Consumer confidence also dropped 3.4 points to 76.4 in the past week.

This confidence dropped in New South Wales, Victoria, Queensland, and Western Australia. Only South Australia remained constant.

Less than one-fifth of Australians now believe their families will be better off in future.

“Looking forward, now under a third of Australians, 28 percent (down 5ppts), expect their family to be ‘better off’ financially this time next year while a rising 36 percent (up 3ppts), expect to be ‘worse off,’” the research showed.

ANZ economist Madeline Dunk said inflation expectations could affect the Reserve Bank of Australia’s (RBA) future decision.

“Inflation expectations rose to 5.4 percent, reversing the falls seen in the previous two weeks. Inflation expectations are likely to be of interest to the RBA, especially given the recent strength in petrol prices which have averaged over $2 per litre for the last six weeks,” she said.

The RBA is due to meet for a monetary policy decision on potential rate rises on Oct. 3.