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28 Oct, 2022 10:20

Australian inflation spirals

Food and fuel prices in the country have soared, official data shows
Australian inflation spirals

Consumer prices in Australia jumped 7.3% annually, marking the highest since 1990 and almost three times the pace of wage growth, data by the bureau of statistics (ABS) showed on Wednesday.

The prices rose 1.8% in the last quarter, topping market forecasts of 1.6%, driven by skyrocketing food and energy costs.

According to the report, gas and other household fuel costs soared almost 11% for the quarter. Food prices in the country were already climbing at an annual pace of 9.0%, with the third quarter seeing a surge of 3.2%. Annual inflation for essential goods and services leaped to 8.4% during July-September, the ABS said.

“Whether it’s food, whether it’s electricity, whether it’s rent, inflation is public enemy number one. Inflation is the dragon we need to slay,” the treasurer of Australia, Jim Chalmers, said, addressing the report.

There are also fears that recent flooding across eastern Australia will lift food prices even higher, with supermarket chain Coles already warning of declining volumes in fresh food.

According to economists, prices could spike even higher this quarter. “The upshot is that CPI [consumer price index] inflation will approach 8% in Q4,” senior economist at Capital Economics Marcel Thieliant told Reuters. “The stronger-than-expected rise in consumer prices is consistent with our forecast that the RBA [Reserve Bank of Australia] will hike rates more aggressively than most anticipate.”

The RBA has been increasing interest rates for six consecutive months in an effort to tame inflation. The regulator said this month it expects inflation in Australia this year to reach 7.75%, before dropping to just over 4% in 2023 and around 3% in 2024.

For more stories on economy & finance visit RT's business section