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Inflation rises 7.4%: Here’s what costs the most

The newest inflation read is the second-highest annual increase since the start of monthly reporting.

A composite image of Australian currency and people lined up at a grocery story to demonstrate rising inflation.
Inflation jumped again in January. (Source: Getty)

The cost of living rose 7.4 per cent in the year to January 2023, according to the latest inflation data from the Australian Bureau of Statistics (ABS).

"This month's annual increase of 7.4 per cent is lower than the 8.4 per cent rise for the year to December 2022. It is, however, the second-highest annual increase since the start of the monthly CPI (Consumer Price Index) indicator series in September 2018, signifying ongoing high inflation,” ABS head of prices statistics Michelle Marquardt said.

The most significant contributors to the annual increase in the January monthly read were housing (up 9.8 per cent), food and non-alcoholic beverages (up 8.2 per cent) and recreation and culture (up 10.2 per cent).

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“The annual increase for the housing group in January (up 9.8 per cent) was lower than December (up 10.1 per cent),” Marquardt said.

“The key contributors to this change were new dwellings and rents. In monthly terms, both new dwellings (up 0.5 per cent) and rents (up 0.7 per cent) … rose. However, rents are growing more strongly than they were 12 months ago while the increases in new-dwelling prices are moderating compared to a year ago.”

Prices for food and non-alcoholic beverages rose 8.2 per cent annually, lower than the 9.5 per cent annual increase in December.

“On a monthly basis, most food and non-alcoholic beverages prices rose. The main exception was fruit and vegetables, which fell in price (down 2.3 per cent),” Marquardt said.

“Prices for the recreation and cultural group remained elevated in the year to January. This was primarily due to holiday travel and accommodation rising 17.8 per cent for the year to January, down from 29.3 per cent for the year to December.

"Airfares and holiday accommodation prices tend to be quite variable, and this month is no exception. On a monthly basis, holiday travel and accommodation prices fell 7.2 per cent in January, following a rise of 29.3 per cent in December."

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