The latest figures from the Australian Bureau of Statistics (ABS) indicate that inflation rose 6.8 per cent in the 12 months to February 2023. This is the second consecutive monthly drop in annual inflation, following the 8.4 per cent peak in December and the 7.4 per cent rise in January.
Despite the lower figure, inflation is still significantly higher than the Reserve Bank of Australia’s (RBA) target of 2 to 3 per cent.
The significant drop in inflation is a positive sign that the economy is on the right track. The rate of inflation had previously peaked in December, with rising costs in housing, health, and food being the main contributors. This increase was a result of increased demand due to the easing of COVID-19 restrictions, as well as higher costs associated with the export of goods, services, and commodities.
At its meeting next week, the Reserve Bank will closely examine the recent data issued by the Australian Bureau of Statistics on Wednesday in order to decide whether to raise interest rates for the eleventh consecutive time.
Michelle Marquardt, the head of statistics at ABS, observed the yearly increase for the housing sector was less than it was in January.
“In the 12 months to February, the growth of new dwellings fell to its lowest point since February 2022 at 13.0 per cent, as the cost of building materials drops. Despite this, rent prices rose once more due to the constrained rental market, keeping the annual growth rate at 4.8 per cent, as seen in January,” she said.