Annual inflation rate hits 6.1% as cost of basic necessities rises

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Credit: James Ross/AAP Image

Inflation soared to an annual rate of 6.1% in the June quarter, new data from the Australian Bureau of Statistics (ABS) has revealed, confirming a drastic rise in the cost of basic necessities.

This is the highest annual increase since the introduction of the GST in July 2000.

In its new analysis, released Wednesday morning, the ABS confirmed that the consumer price index (CPI) not only rose over the year, but also rose 1.8% from the March quarter. – where year-on-year inflation reached 5.1%.

Core inflation – otherwise known as trimmed average inflation, which excludes the most volatile spending segments – also rose 4.9%.

Cost increases were driven by housing, up 9% year-on-year, transportation costs, including gasoline, up 13.1% year-on-year, and furnishings, equipment household goods and services, with annual cost growth of 6.3%.

These increases were driven by strong demand and supply-side shortages, which suppressed the availability of key building materials, fuel and household items through 2022.

Ongoing supply chain disruptions caused by the COVID-19 pandemic clashed with disruptions caused by flooding to slow the flow of essential goods and services during the survey period.

High fuel prices have pushed up the cost of heavy goods like furniture.

At the same time, labor shortages – a hangover from Australia’s closed border policies at the start of the pandemic – are driving up the cost of some services.

Hospitality venues counting the cost of rising ingredient prices now have solid data, with the cost of vegetables alone up 7.3% over the year, largely due to the impact of flooding on farms on the east coast of Australia.

The figures are slightly lower than general market expectations, suggesting that June data would show an even bigger increase in inflationary pressures.

Earlier Wednesday, Westpac analysts had predicted CPI inflation of 6.1% on an annual basis and 1.7% in the quarter, an estimate slightly below broader market expectations of an annual rise of 6. 3% and a quarterly increase of 1.9%.

ANZ found its estimates slightly too aggressive, having predicted year-on-year inflation growth to reach 6.6% and 2.3% quarter-on-quarter.

More soon.

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