Australian CPI Rises 1.2% in Q3 2023, Annual Inflation Eases to 5.4%

The Consumer Price Index (CPI) in Australia increased by 1.2% in the third quarter of 2023, as reported by the Australian Bureau of Statistics. This rise is attributed to significant increases in Automotive fuel (+7.2%), Rents (+2.2%), New dwelling purchase by owner-occupiers (+1.3%), and Electricity (+4.2%).

Annual Inflation Overview:

  • Over the twelve months to the September 2023 quarter, the CPI recorded an annual increase of 5.4%.
  • This marks the third consecutive quarter of lower annual inflation, down from the peak of 7.8% in the December 2022 quarter.

Key Contributors to Inflation:

  1. Rental Prices Soar: Rental prices experienced the most substantial annual rise since 2009, surging by 7.6%. This surge is attributed to low vacancy rates amid a tight rental market across Australian capital cities.
  2. Utilities Inflation: Prices for utilities, including electricity, water, sewerage, and gas, rose by 12.6% in the 12 months to September 2023. Higher wholesale prices and operating costs contributed to this increase.
  3. Transport Costs: Automotive fuel prices recorded a notable increase of 7.2% during the quarter.
  4. Government Policy Impact: Changes to Commonwealth Rent Assistance (CRA) and the Child Care Subsidy (CCS) had notable impacts. The September quarter results show a partial impact of the CRA changes, and the remaining impact will be reflected in the December 2023 quarter.

Government Initiatives:

  • The CPI weights have been partially updated, with increased weight for International holiday travel reflecting contemporary spending patterns.

Analyst’s Commentary: “This quarter’s CPI data reveals a mixed economic landscape, with some sectors experiencing inflationary pressures while others show moderation. The easing of annual inflation for the third consecutive quarter is a positive sign, and government initiatives are playing a role in shaping these trends,” commented [Analyst Name], an economic analyst.

Note: CPI measures household inflation and includes statistics about price changes for categories of household expenditure.