Australia Inflation Rate

The annual inflation rate in Australia jumped to 3.8% in Q2 2021 from 1.1% in Q1 and matching market consensus. This was the highest reading since Q3 2008, reflecting some base effects following the introduction of free child care and a record fall in fuel prices in Q2 2020. Main upward pressure came from transport (10.7% vs 0.4% in Q1), food (0.7% vs 0.7%), alcohol & tobacco (6.7% vs 7.9%), furnishings (16.9% vs 2.7%), health (4.8% vs 3%), recreation (2.5% vs 1.5%), education (3.7% vs -0.1%), and insurance & financial services (0.6% vs 0.6%). In addition, cost fell at slower paces for both housing (-0.2% vs -1.1%), and communication (-1.3% vs -1.9%). On a quarterly basis, consumer prices went up 0.8%, after a 0.6% gain in Q1, above forecasts of 0.8%, driven by automotive fuel, medical and hospital services, and electricity. RBA Trimmed Mean CPI rose 1.6% yoy in Q2, the most since Q1 2020, after a 1.1% rise in Q1.Quarter-on-quarter, the index rose 0.5% after gaining 0.3% in Q1.