Inflation is growing at its fastest pace in 20 years. Behave differently.

 

 

Despite a strong expansion in the Australian economy is underway. This is expected to continue over the forecast period, despite the slowdown in global growth. The domestic outlook is supported by the substantial boost to national income from high commodity prices and growth in private consumption and investment.

 

March quarter 2022. The Australian economy grew 0.8% during the March quarter 2022, and 3.3% over the past year. Strength came from household consumption, which grew 1.5%, and from a record $7.5 billion ramp-up in inventories.

 

 

Here’s where things currently stand (at the end of March): Fuel prices have jumped by 35 per cent in the past 12 months, which is the largest annual increase since 1990 Building materials prices are 15.4 per cent higher than a year ago Consumer durables inflation is rising at its fastest pace in more than three decades (this category includes motor vehicles, household furniture and goods, and computers and televisions, among other things)  Grocery prices (excluding fruit and vegetables) rose 2.8 per cent in the quarter, which is the strongest quarterly increase since 1983 Fruit and vegetable prices are 6.75 per cent higher than a year ago Rents rose by 0.6 per cent in the March quarter, which is the strongest quarterly increase since the September quarter of 2014 Tertiary education prices increased by more than 5 per cent in the March quarter, driven by the federal government’s decision to increase the cost of some university courses

 

The annual inflation rate in Australia surged to 5.1% in Q1 of 2022 from 3.5% in Q4, surpassing market estimates of 4.6% and marking the highest reading since the introduction of the Goods and Services Tax in the early 2000s, reflecting soaring fuel prices and surging building cost.

The central forecast for 2022 is for headline inflation of around 6 per cent and underlying inflation of around 4¾ per cent; by mid 2024, headline and underlying inflation are forecast to have moderated to around 3 per cent. Economists argue that the 2022 Russian invasion of Ukraine was the principal cause of higher inflation, comprising 3.5% of the 8.6%.

 

 

Economists are optimist that Australia in 2025 will be: strong, prosperous, healthy and secure and positioned to benefit all Australians in a rapidly changing world. We are told that Australia will need a diverse economy built on sustainable productivity growth, knowledge-based industries and high value goods and services.

 

Source: ABC News