The rate of inflation in Australia is 6.1 percent as the inflation crisis looms.
The Australian Bureau of Statistics (ABS) today announced that the country’s annual inflation was 6.1 percent in the quarter ending June – the fastest rate increase in more than 20 years. And the trend is set to get worse.
The ABS released data ABS on Wednesday indicated that consumers’ price index (CPI) commonly referred to as inflation, increased by 1.8 percent in month of June, bringing total annual inflation to 6.1 percent.
ABS Prices Statistics head Michelle Marquardt stated that the increase for the quarter “was the second-highest since the introduction of the GST” that was implemented in the year 2000.
Australian Treasurer Dr Jim Chalmers said the increase is likely to put pressure on families who are already struggling to pay the costs of living.
“We have economic challenges to overcome. We face rising inflation. We are facing rising interest rates,” he said.
“There are real challenges there, but I’m comfortable that my government has a plan to deal with those challenges.”
Certain analysts have suggested that the rate of inflation is so high that it could trigger to the Reserve Bank of Australia (RBA) to increase rates as high than 75 basis point during its next meeting on Tuesday.
If the RBA does decide to raise rates of interest by this amount it will be the biggest annual increase in interest rates since December 1994.
Even so however, the annual 6.1 percentage CPI number was slightly lower than the 6.3 percent analysts had predicted.
Crisis in the cost of living
Treasurer Chalmers has said that the announcement of today’s inflation rate is likely to come as no shock to Australians who are facing the costs of living each time they purchase petrol or food.
In the month of June, ABS data shows new home prices increased by 5.6 percent, while petrol prices increased increasing by 4.2 percent, which is the reason for the overall important CPI rise.
Ms Marquardt stated that Car fuels from the CPI’s Automotive Fuel Series reached new heights that had not been previously seen.
“The CPI’s automotive fuel series reached a record level for the fourth consecutive quarter,” she added.
“Fuel prices rose strongly over May and June, following a fall in April due to the fuel excise cut.”
The cost of goods went up during the quarter at a higher rate than services, increasing 2.6 percent and 0.6 percent respectively.
Supply chain disruptions caused by flooding or shortages of labour, as well as increasing freight costs saw prices for fruits and vegetables increase by 7.3 percent, and seafood, meat, and bread 6.3 percentages higher.
Non-discretionary goods increased by 7%, and furniture prices were also up due to issues such as the increased cost of transport, materials and inventory shortages that are the reason for the price increases.
Inflation increases across the globe
Living costs continue to climb not just in Australia and around the world and around the world, including New Zealand also experiencing new levels of 32 years, and reaching 7.3 percentage CPI in the month of June.
In the case of both the UK as well as the US both countries reported high inflation rates of 9percent in June, and the Eurozone had its annual rate increase to 8.6 percent.
The rate of inflation will continue to increase
Treasurer Chalmers has reminded Australians to expect that the rising costs of living as well as rising pressures will only get worse.
“Inflation is rising and high. It’s going to get harder before it gets easier” He declared.
“The reality is the quarterly outcome does not yet include the electricity price spike that came in July.”
The treasurer also said that the government was trying its best to tackle inflation’s “domestic factors” to inflation.
“I think Australians understand when they’re at the supermarket, when prices are going through the roof, that this challenge is partly global and there are domestic components of this challenge as well,” the economist said.
“I wanted to reassure them that the government is very focused on those domestic factors.”