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

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 james.glynn@wsj.com


  (END) Dow Jones Newswires
  07-27-21 2206ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.