Australia's July 2023 CPI Soars 4.9% Yearly

The monthly Consumer Price Index (CPI) indicator rose 4.9 per cent in the 12 months to July 2023, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: "This month's annual increase of 4.9 per cent is down from 5.4 per cent in June. Annual price rises continue to ease from the peak of 8.4 per cent in December 2022."

The most significant contributors to the July annual increase were Housing (+7.3 per cent) and Food and non-alcoholic beverages (+5.6 per cent). Reducing the July increase were price falls for Automotive fuel (-7.6 per cent) and Fruit and vegetables (-5.4 per cent).

"CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel. It can be helpful to exclude these items from the headline CPI indicator to provide a view of underlying inflation. When excluding these volatile items, the decline in annual inflation is more modest at 5.8 per cent in July, compared to 6.1 per cent in June," Ms Marquardt said.

*Volatile items are Fruit and vegetables and Automotive fuel

The annual increase for Housing of 7.3 per cent was slightly lower than the 7.4 per cent increase in June. New dwelling prices rose 5.9 per cent, which is the lowest annual rise since October 2021, as building material price increases continued to ease. Rent prices rose 7.6 per cent in July, up from 7.3 per cent in June, as the rental market remains tight.

Electricity prices rose 15.7 per cent in the 12 months to July and increased 6.0 per cent in the month of July. These increases reflect price reviews across all capital cities. Rebates introduced from July reduced the impact of electricity price increases for eligible households.

"The Energy Bill Relief Fund provides eligible households with rebates ranging from $43.75 to $250 in July. If we exclude the impact of rebates from the July 2023 figures, electricity prices would have recorded a monthly increase of 19.2 per cent," Ms Marquardt said.

Food and non-alcoholic beverages rose 5.6 per cent in the 12 months to July, down from the 7.0 per cent annual increase in June and the lowest annual increase since May 2022.

"Food inflation continues to ease across most categories, while fruit and vegetable prices fell 5.4 per cent compared to 12 months ago due to favourable growing conditions leading to increased supply," Ms Marquardt said.