Inflation in Australia bounces back up

Housing, food and transport contributed to a spike in Australian inflation. Photo / NZME

Australia’s inflation rate jumped to 6.8 per cent in the year to April, higher than economists’ predictions, the Australian Bureau of Statistics (ABS) said today.

The Consumers Price Index was higher than the 6.3 per cent annual rise reported in March.

Economists had expected an inflation rate of 6.4 per cent.

Annual inflation was driven higher by housing (up 8.9 per cent), food (up 7.9 per cent) and transport (up 7.1 per cent).

“The halving of the fuel excise tax in April 2022, which was fully unwound in October 2022, is impacting the annual [headline] movement for April 2023,” said Michelle Marquardt, ABS’s head of prices statistics.

Marquardt said CPI inflation is often impacted by items with volatile price changes such as automotive fuel, fruit and vegetables and holiday travel.

“It can be helpful to exclude items with volatile price changes from the headline CPI to provide a view of underlying inflation,” she said. “When excluding these volatile items, the annual movement of the monthly CPI indicator was 6.5 per cent in April, lower than 6.9 per cent recorded in March.”

Inflation is still lower than the high of 8.4 per cent recorded in December 2022.

The 8.9 per cent annual increase for the housing group in April was lower than the increase in March of 9.5 per cent.

“Within the housing group, new dwelling prices rose 9.2 per cent, which is the lowest annual growth since February 2022 as building material prices continue to ease,” Marquardt said.

“Rent prices rose further from an annual rise of 5.3 per cent in March to 6.1 per cent in April as the rental market remains tight.”