Inflation declines; some essentials prices significantly rise

Inflation has stabilised, but essential prices have surged, burdening Australians despite rising wages.

In Short

Inflation has decreased to target levels, with a cut in interest rates anticipated next week. However, essential items have seen significant price hikes over the past three years, despite an 11.2% rise in wages.

The overall inflation rate has returned to target levels, and an interest rate cut is expected next week.

Despite this positive trend, everyday items have seen significant price increases over the past three years. Wages have risen by an estimated 11.2%, yet some prices have surged by up to 40%, impacting personal budgets.

Essential items, such as those found in supermarkets, along with gas and insurance, have particularly been affected.

Prices for oils, fats, gas, eggs, and insurance have notably increased, while costs for electricity, childcare, audio-visual equipment, and household textiles have decreased. For the Reserve Bank of Australia (RBA), the overall inflation rate is the primary concern.

Recent data indicates annual inflation has fallen to 2.4%, within the RBA’s target range of 2 to 3%. This is a significant reduction from 4.1% in December 2023, 7.8% in December 2022, and 3.5% in December 2021.

Inflation is expected to remain within this target range in the future.