Australian Inflation Rate Drops to 3.5% in July 2024

Today (August 28, 2024), the Australian Bureau of Statistics (ABS) released the latest – Monthly Consumer Price Index Indicator – for July 2024, which showed that the annual inflation rate has fallen from 3.8 per cent in June to 3.5 per cent in July, a significant decline which continues the downward trend. That trend has been interrupted over the last few years by transitory factors like weather events but it is clear there is not an excessive spending situation present in the Australian economy, which should end all talk of even more aggressive monetary policy (within the mainstream logic).

The latest monthly ABS CPI data shows for July 2024 that the annual results are:

• The All groups CPI measure rose 3.5 per cent over the 12 months (down from 3.8 in June).
• Food and non-alcoholic beverages 3.8 per cent (from 3.3).
• Clothing and footwear 1.9 per cent (3.6).
• Housing 4.0 per cent (5.5). Rents (6.9 per cent cf. 7.1 per cent).
• Furnishings and household equipment -0.9 per cent (-1.1).
• Health 5.3 per cent (5.3).
• Transport 3.4 per cent (4.2).
• Communications 1.9 per cent (1.0).
• Recreation and culture 1.1 per cent (from 0.6).
• Education 5.6 per cent (5.6).
• Insurance and financial services steady at 6.4 per cent.

The ABS Media Release (August 28, 2024) – Monthly CPI indicator rose 3.5% in the year to July 2024 – noted that:

The monthly Consumer Price Index (CPI) indicator rose 3.5 per cent in the 12 months to July 2024, down from 3.8 per cent in June. The most significant contributors to the annual rise were Housing (+4.0 per cent), Food and non-alcoholic beverages (+3.8 per cent), Alcohol and tobacco (+7.2 per cent), and Transport (+3.4 per cent)…

Housing rose 4.0 per cent in the 12 months to July, down from 5.5 per cent in June. Rents increased 6.9 per cent for the year to July, down from a rise of 7.1 per cent in the 12 months to June…

FAQs

1. What is the current inflation rate in Australia?

The current annual inflation rate in Australia as of July 2024 is 3.5%, down from 3.8% in June.

2. Which sectors experienced the most significant price increases?

In July 2024, the sectors with the most significant price increases were Housing, Food and non-alcoholic beverages, Alcohol and tobacco, and Transport.

3. How did the introduction of new rebates impact electricity prices?

The introduction of new Commonwealth and State rebates led to a 5.1% fall in electricity prices in July. Without the rebates, electricity prices would have risen by 0.9%.

Conclusion

The decline in the annual inflation rate in Australia in July 2024 indicates a positive trend towards price stability. With various sectors experiencing moderate price increases and the impact of rebates on electricity prices, it is evident that targeted fiscal interventions can play a role in combating inflation. The data suggests that there is no urgent need for further aggressive monetary policy measures and the outlook for inflation is for continued decline in the near future.

For more information and updates on the Australian economy, stay tuned to the ABS releases and other official sources.