Consumer prices in Australia rose 7.3% annually, marking the highest level since 1990 and nearly tripling the pace of wage growth, data from the Bureau of Statistics (ABS) showed on Wednesday.
Prices rose 1.8% in the latest quarter, beating market forecasts of 1.6%, driven by skyrocketing food and energy costs.
According to the report, the costs of gasoline and other household fuels soared almost 11% during the quarter. Food prices in the country were already rising at an annual rate of 9.0%, with the third quarter seeing a 3.2% increase. Annual inflation for essential goods and services jumped to 8.4% during July-September, the ABS said.
“Whether it’s food, electricity, rent, inflation is public enemy number one. Inflation is the dragon we must kill.” Australian Treasurer Jim Chalmers said, referring to the report.
There are also fears that recent flooding in eastern Australia will push food prices even higher, with supermarket chain Coles already warning of declining fresh food volumes.
According to economists, prices could rise further this quarter. “The result is that the CPI [consumer price index] inflation will approach 8% in the fourth quarter”, Capital Economics senior economist 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 raise rates more aggressively than most anticipate.”
The RBA has been raising interest rates for six consecutive months in an effort to control inflation. The regulator said this month that it expects inflation in Australia this year to hit 7.75%, before falling to just over 4% in 2023 and around 3% in 2024.
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