Cost-of-living pain continues: Inflation up 7.8%
Australia’s inflation rate is the highest it has been since the 1990s.
The monthly Consumer Price Index (CPI) rose 7.8 per cent in the year to December 2022, and 1.9 per cent in the December 2022 quarter.
The increase is higher than many economists had predicted, with many expecting a 7.5 per cent annual rise.
At 7.8 per cent, the annual inflation rate is the highest it has been since 1990, the Australian Bureau of Statistics (ABS) said.
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The December quarter increases were largely driven by holiday travel and accommodation (domestic up 13.3 per cent and international up 7.6 per cent) and rising electricity prices (up 8.6 per cent).
"Strong demand, particularly over the Christmas holiday period, contributed to price rises for domestic holiday travel and international airfares," ABS head of prices statistics Michelle Marquardt said.
"The rises seen for domestic and international travel were notably higher than historical December-quarter movements."
Surging electricity prices were attributed to the unwinding of the $400 electricity credit offered by the Western Australian government. This increase was partially offset by Queensland’s $175 cost-of-living rebate and Tasmania’s $119 winter bill buster electricity discount, the ABS said.
Prices for new dwellings slowed compared to recent quarters (up 1.7 per cent), but were still stronger than historic norms.
"Labour and material costs are driving price growth in this area, with signs of material cost pressures easing," Marquardt said.
"Slowing demand for new dwelling construction was reflected in a lower quarterly rate of inflation for new dwellings this quarter compared with the past five quarters."
Meanwhile, food prices continued to rise over the quarter, driven by meals and takeaway foods (up 2.1 per cent).
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