Canberra, July 27, (dpa-AFX/GNA) - Australia’s consumer price inflation (CPI) reached its highest level since 2001 on high dwelling and auto fuel prices, the latest data from the Australian Bureau of Statistics (ABS) showed on Wednesday.
Consumer price inflation accelerated to 6.1% in the second quarter, from 5.1% in the first quarter. A similar higher rate was last seen in the second quarter of 2001.
Inflation had been forecast to advance to 6.2%.
The annual increase in CPI was the largest since the introduction of the goods and services tax, the ABS said.
Despite a pick-up in inflation compared to the second quarter, it was not as strong as expected, Marcel Thieliant, an economist at Capital Economics said. That suggests that the Reserve Bank of Australia may opt for another 50-basis-point rate hike at next week’s meeting, rather than the 75 basis points previously anticipated, the economist added.
The most significant contributor to the high inflation was new dwelling costs, which were up 20.3%, the strongest since the series commenced in the June 1999 quarter.
At the same time, automotive fuel prices surged 32.1%. Fuel prices increased following an oil price shock caused by the Russian invasion of Ukraine last quarter, coupled with the ongoing easing of Covid-19 restrictions strengthening global demand.
On a quarterly basis, consumer prices gained 1.8%, following a 2.1% rise in the previous quarter. Economists had forecast quarterly growth of 1.9%.
The statistical office said goods accounted for 79% of the rise in the CPI this quarter, reflecting high freight costs, supply constraints and prolonged strong demand. Annual trimmed mean inflation, which excludes large price rises and falls, increased to 4.9%, the highest since the ABS first published the series in 2003.
Trimmed mean inflation increased to 1.5% sequentially in the second quarter.
GNA