The consumer price index (CPI) rose 4.0 per cent in the 12 months to May 2024, up from 3.6 per cent in April, according to the latest data from the Australian Bureau of Statistics (ABS).
The increase exceeded analysts’ expectations of a 3.8 per cent rise in May.
According to the ABS, the most significant contributors to the annual rise in May were housing (+5.2 per cent), food and non-alcoholic beverages (+3.3 per cent), transport (+4.9 per cent), and alcohol and tobacco (+6.7 per cent).
“CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel,” said Michelle Marquardt, ABS head of prices statistics.
“It can be helpful to exclude these items from the headline CPI to provide a view of underlying inflation, which was 4.0 per cent in May, down from 4.1 per cent in April.”
Housing rose 5.2 per cent in the 12 months to May, up from 4.9 per cent in April, while rents increased 7.4 per cent for the year, reflecting a tight rental market across the country. The annual rise in new dwelling prices remained steady at 4.9 per cent with builders passing on higher costs for labour and materials.
Electricity prices rose 6.5 per cent in the 12 months to May, up from 4.2 per cent in April.
“The introduction of the Energy Bill Relief Fund rebates from July 2023 has mostly offset electricity price rises from annual price reviews in the same month. Excluding the rebates, electricity prices would have risen 14.5 per cent in the 12 months to May 2024,” Marquardt said.
Annual inflation for food and non-alcoholic beverages was 3.3 per cent in May, down from 3.8 per cent in April. The largest contributor to the annual increase in food prices was meals out and takeaway foods, which rose 4.2 per cent in the 12 months to May compared to 5.4 per cent to April.
Holiday travel and accommodation prices rose 2.9 per cent in the 12 months to May, following a 6.2 per cent annual fall to April.
In monthly terms, holiday travel and accommodation prices fell 2.7 per cent, following a 4.6 per cent rise in April, driven by domestic holiday travel and accommodation due to a fall in demand following the school holiday period.
