Australia’s inflation rate hits 6.1%


Inflation rose 1.8% in the June quarter and 6.1% throughout the year, the largest annual increase since the introduction of the GST in 2001.

“These are face-to-face figures in relation to the cost of living pressures that Australians in every corner of our country are feeling as inflation is high and rising,” Chalmers said.

Rising gasoline prices have helped push up the price index over the past three months despite the fuel tax cut. An increase in new buildings (+5.6%) and fuel costs (+4.2%) were the main drivers of inflation in the three months to the end of June, said Michelle Marquardt, head of price statistics at ABS.

Over the past 12 months, the cost of new homes and fuel have increased by 20.3% and 32.1% respectively.

“Shortages of building materials and labor, high transportation costs and high levels of construction activity continued to drive up prices for newly built homes,” she said. .

“The CPI auto fuels series hit a record high for the fourth consecutive quarter. Fuel prices rose sharply in May and June, after falling in April due to the reduction in fuel excise duties.

Food prices also rose, driven by higher costs for vegetables (up 7.3%) and more expensive fruits (up 3.7%).

“The annual rise in the CPI is the largest since the introduction of the goods and services tax,” Marquardt said.

Treasurer Jim Chalmers said the inflation figures were “confronted”.Credit:James Brickwood

Chalmers will deliver an economic statement to Parliament on Thursday, and the Treasurer says that too will be difficult, showing how rising inflation and interest rates and slowing global growth will affect Australia’s economy.

“It will mainly focus on economic forecasts rather than fiscal forecasts,” he said.

The statement will include forecasts for inflation, wage growth, economic growth and unemployment.

“It will be confronting in the sense that what you can expect to see in tomorrow’s ministerial statement is the substantial upward-revised inflation, the downward-revised growth and all the implications that entails,” Chalmers said.

“I wanted to make sure that Australians understood and understood the circumstances as we expect them to be over the next few years so that they could understand the kinds of decisions that might be necessitated by these economic conditions. “

Inflation forecasts show it will peak towards the end of the year and moderate through 2023, Chalmers said, but it will moderate “from an incredibly high base.”

“It will take some time to reach more normal levels of inflation,” he said, adding that energy security and oil prices played a role in keeping inflation high in the world. world.

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The Treasurer says workers can expect real wage growth in this legislature, but they shouldn’t expect wages to keep pace with inflation in the coming months.

“We already have inflation north of 6%. We expect it to increase,” he said. “The idea that we’re expecting wage growth to follow that, I think, won’t be credible in the short term.”

Chalmers said when it comes to easing pressures on the cost of living, the government has a tough road ahead.

“It’s not possible, with our budget constraints, to fund all the good ideas people might have about lowering the cost of living,” he said.

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