Australian Inflation Spiked in 2Q, But Jump Is Likely to Be Temporary

By James Glynn

SYDNEY--Australian consumer prices rose 0.8% in the second quarter, fanned by rising fuel costs, the Australian Bureau of Statistics said Wednesday.

Annual inflation increased to 3.8% in the second quarter, up sharply from the 1.1% rise marked in the first quarter and largely in line with the result expected by economists.

Automotive fuel prices climbed 6.5% in the second quarter, while medical and hospital services increased 2.4% due to an annual increase in private health insurance premiums, the ABS said.

Electricity prices jumped 3.3% over the quarter while price rises were higher across a range of food items such as vegetables, fruit and beef due to a variety of factors including flooding in some regions of New South Wales, the ABS added.

Motor vehicle prices rose 2.2% over the quarter due to increased demand combined with supply constraints such as the global semi-conductor shortage.

The ABS said the sharp jump in annual inflation was likely to be temporary.

"The annual CPI movement was significantly influenced by Covid-19-related price changes from this time last year," the ABS said.

Key drivers of annual inflation included things like the full unwinding of a move to free childcare implemented in 2020 to bolster the industry amid the pandemic.

Measures of core inflation edged higher. Trimmed mean inflation rose 1.6% through the year, up from 1.1% in the first quarter.

Write to James Glynn at [e-mail]

(END) Dow Jones Newswires

07-27-21 2206ET