The consumer price index (CPI) rose by 7.8 per cent in the year to December 2022, according to data released by the Australian Bureau of Statistics (ABS) on Wednesday, including a 1.9 per cent rise over the December quarter, which exceeded market expectations.
“This is the fourth consecutive quarter to show a rise greater than any seen since the introduction of the Goods and Services Tax (GST) in 2000,” said ABS head of prices statistics, Michelle Marquardt.
“The increase for the quarter was slightly higher than the quarterly movements for the September and June quarters last year (both 1.8 per cent).”
New dwellings (+17.8 per cent), domestic holiday travel and accommodation (+19.8 per cent) and automotive fuel (+13.2 per cent) were reported to have been the most significant contributors to headline inflation on an annual basis.
“The annual increase for the CPI is the highest since 1990. Annual inflation for goods such as new dwellings and automotive fuel steadied this quarter. However, we saw an uptick in inflation for services such as holidays and restaurant meals,” said Ms Marquardt.
According to the ABS, the annual price increase seen for services (+5.5 per cent) was the highest since 2008, while goods (+9.5 per cent) showed little change from the previous quarter.
The annual increase of discretionary goods and services (+7.1 per cent) moved closer to non-discretionary goods and services (+8.4 per cent) compared with recent quarters.
For the third consecutive quarter, annual trimmed mean inflation was the highest since 2003, increasing to 6.9 per cent, up from 6.1 per cent in the September quarter.
The ABS reported that the most significant contributors to the quarterly rise in headline inflation were domestic holiday travel and accommodation (+13.3 per cent), electricity (+8.6 per cent), and international holiday travel and accommodation (+7.6 per cent).
“Strong demand, particularly over the Christmas holiday period, contributed to price rises for domestic holiday travel and international airfares,” said Ms Marquardt.
“The rises seen for domestic and international travel were notably higher than historical December quarter movements.”
According to Ms Marquardt, the main factor influencing the increase in electricity prices was the unwinding of the $400 electricity credit offered by the Western Australian Government to all households in the previous.
“This was partially offset by the ongoing impact of the Queensland government’s $175 Cost of Living rebate from September 2022 and the introduction of the Tasmanian government’s $119 Winter Bill Buster electricity discount for concession households,” she noted.
Meanwhile, growth in prices for new dwellings (+1.7 per cent) slowed relative to recent quarters (+3.7 per cent in September and +5.6 per cent in June) but was said to have remained stronger than historic norms.
The ABS simultaneously released its monthly CPI indicator for December, which rose 8.4 per cent annually following increases of 7.3 per cent in November and 6.9 per cent in October.
“The monthly indicator recorded the largest annual rise in the series in December,” Ms Marquardt said.
“The most significant contributors in the 12 months to December were new dwellings, up 16.0 per cent, and holiday travel and accommodation, up 29.3 per cent. Airfare and accommodation prices rose in response to strong demand over the Christmas holiday period.”
