Australia records fastest rise in inflation since introduction of GST

inflation in Australia has reached a level not seen in decades, recording the second highest quarterly increase since the introduction of the Goods and Services Tax (GST).

New data from the Australian Bureau of Statistics (ABS) showed the Consumer Price Index – otherwise known as CPI – rose 6.1 per cent over the 12 months to the June 2022 quarter.

On a quarterly basis, the CPI rose 1.8 per cent, the second highest three-month jump since the introduction of the GST.

Inflation is roaring at a level not seen since the early 90s. (Graphic: Tara Blancato)

The last time annual inflation was at 6.1 per cent in September 2000. Before that, the previous high was 6.9 per cent in December 1990.

The biggest contributors to the spike were the prices of new homes – which rose 5.6 per cent) – and petrol, which recorded a 4.2 per cent hike.

Head of Prices Statistics at the ABS Michelle Marquardt said the annual growth in the price of new properties was the highest seen in more than two decades.

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

“Annual price inflation for new dwellings was the strongest recorded since the series commenced in 1999.”

Today’s 6.1 per cent annual rise was slightly below market expectations, which was factoring in a figure of up to 6.3 per cent.

Many believed a bigger-than-expected annual hike in the CPI would incentivize the Reserve Bank of Australia to introduce an “oversize” hike at its August meeting next week.

Given today’s figure came in below expectations the central bank is now expected to deliver a “standard” hike of around 50 basis points.

Australians are feeling the pain of annual inflation via rising grocery prices. (Jacky Ghossein/AFR)

Inflation is the general increase in the cost of goods and services.

The CPI is the generally accepted figure that tracks inflation in Australia.

Released quarterly, the CPI tracks a hypothetical “basket” of goods and services that an Australian household would or may consume.

This is then condensed down into a single percentage figure.

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