KA-BOOM! Australian inflation goes through the roof
- Australia’s CPI rose big time in the March Quarter, the highest rise since the introduction of the GST.
- New dwelling construction costs soared 6.7% above the March 2021 quarter amid raw material shortages, labour constraints & supply chain disruptions.
- Automotive fuel prices rose at the strongest annual rate in over 30-years.
In the March quarter, Australia’s inflation rate recorded its largest quarterly (2.1%) and annual (5.1%) jumps since the introduction of the GST, 20-years ago.
New dwellings, automotive fuel and tertiary education were the most significant contributors to the March quarter rise in CPI.
Pandemic-related supply chain disruptions, raw materials shortages and labour constraints have caused the price of new dwellings to soar by 6.7% from the March 2021 quarter, its largest rate increase since September 2000. The largest inflation rise per capital city was recorded in Perth as new dwelling construction costs soared 15.8%, while Brisbane came in second with a 6% rise.
Automotive fuel prices rose by 11% during the quarter; the strongest annual rise in over 30-years. Consumers were slugged at the fuel pump as the war in Ukraine and ongoing lockdowns in China fueled supply uncertainty.
The job-ready graduate package that was introduced in January 2021 continues impacting the cost of tertiary education. The new package has led to increased fees on average, causing the tertiary education CPI to jump 6.3% in the March quarter.
The already high cost of living in Sydney had the lowest CPI rate increase of all capital cities during the quarter, with an increase of just 1.7%, while Perth’s CPI jumped 3.3% driven by a 15.8% surge in the cost of new dwellings.
Such a steep national increase in CPI has economists predicting the RBA will drastically raise interest rates from the current record low 0.1% in May to address the high cost of living.
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