The Australian Bureau of Statistics (ABS) has confirmed that it will soon begin publishing a monthly consumer price index (CPI) indicator to provide a timelier guide to inflation in Australia.
While noting that the quarterly CPI figures would remain Australia’s key measure of inflation, Australian statistician Dr David Gruen said the indicator would become an important tool for policymakers, academics and businesses.
An information paper outlining the new monthly indicator will be released on 16 August and the ABS will welcome feedback up until 13 September.
“The information paper will show how the monthly CPI Indicator can provide an earlier guide to inflation developments, particularly in times of significant change,” said Dr Gruen.
“One important point of distinction with the monthly Indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month.”
Australia remains one of the few advanced economies to report CPI data on a quarterly basis, with the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England all reporting the key inflation indicator monthly.
The ABS said that it intends to publish the first standalone monthly CPI indicator in October alongside its regular quarterly CPI release.
“The monthly CPI Indicator has been made feasible by using new data sources to reduce data collection costs, particularly scanner data and web-scraping techniques to provide high-frequency data at lower cost,” explained Dr Gruen.
“The use of new data sources has seen the ABS generate a range of timely new insights across the economy without asking more of Australian businesses and households.”
CPA Australia, which had previously urged for the adoption of monthly CPI reporting, welcomed the announcement from the ABS.
“This change will deliver more timely information into the hands of businesses and others who rely on economic data,” said CPA Australia general manager media and content Dr Jane Rennie.
“We're very pleased [that] CPA Australia’s call for more timely inflation data has been heard. Access to a monthly CPI indicator will close the information gap and help organisations make better financial decisions.”
Dr Rennie stated that quarterly CPI reporting put Australian governments, regulators and businesses at a distinct disadvantage, particularly in economically uncertain times.
“A monthly CPI indicator will enable a clearer understanding of the effects of monetary policy, geopolitical tensions, supply chain disruptions and local interventions on prices across the Australian economy. Australia’s economy will benefit as a result,” she said.
“In a high inflation environment, we need our institutions to be agile and innovative. With this announcement, the ABS has demonstrated its willingness to be responsive to the needs of the community and embrace new lower-cost data sources to deliver monthly updates.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.