{"id":100806,"date":"2025-01-30T10:00:00","date_gmt":"2025-01-29T23:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=100806"},"modified":"2025-01-29T23:35:04","modified_gmt":"2025-01-29T12:35:04","slug":"australias-inflation-drops-to-2-4","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/australias-inflation-drops-to-2-4\/","title":{"rendered":"Australia\u2019s Inflation Drops to 2.4%, But Rising Rents and Insurance Keep Pressure High"},"content":{"rendered":"\n

According to the Australian Bureau of Statistics<\/strong> (ABS), the country’s consumer price index (CPI) rose by 0.2%<\/strong> in the December 2024 quarter, lowering annual inflation to 2.4%<\/strong>. Falling fuel and electricity prices were the main drivers of the drop, but rising rents, insurance, and medical expenses kept underlying inflation high.<\/p>\n\n\n\n

For the past two years, inflation has been a major worry for both people and policymakers. Even if the most recent statistics show a decrease, the fact that service costs are still rising implies that many Australians are still facing financial difficulties<\/strong>. As it contemplates future monetary policy decisions, the Reserve Bank of Australia<\/strong> (RBA) will be closely monitoring these patterns.<\/p>\n\n\n\n

Energy Price Relief Drives Inflation Slowdown<\/h2>\n\n\n\n

Due in major part to a 9.9%<\/strong> decline in power prices during the December quarter, Australia’s annual inflation rate has dropped to its lowest level since 2021<\/strong>. The drop comes after households received rebates from the 2024\u201325 Commonwealth Energy Bill Relief Fund<\/a><\/strong>, which reduced the strain on energy bills. As a result of declining worldwide oil prices, car gasoline prices also decreased by 7.9%<\/strong> during the course of the year.<\/p>\n\n\n\n

Price increases in other sectors counterbalanced the overall effect of these reductions. The December quarter saw a 2.4%<\/strong> increase in the price of alcohol and tobacco, which helped to drive the 6.2%<\/strong> annual increase. The cost of food was 3.0% higher than it was a year earlier, with prices for meat and seafood\u2014including lamb\u2014in particular up 17.3%<\/strong>.<\/p>\n\n\n\n

The ABS also corrected previous miscalculations in its childcare cost index, reducing it by 5.8%<\/strong>. This adjustment lowered the overall CPI by 0.05<\/strong> percentage points, accounting for the impact of government subsidies introduced in July 2023<\/strong>.<\/p>\n\n\n\n

Service Sector Inflation Remains a Challenge<\/h2>\n\n\n\n

While goods inflation has slowed to 0.8%<\/strong> annually, the lowest rate since 2016,<\/strong> services inflation remains high at 4.3%<\/strong>. The most significant contributors include rent increases (+6.4%<\/strong>), medical and hospital services, and insurance (+11.0%<\/strong>).<\/p>\n\n\n\n

Rental costs, though slightly moderated from the previous quarter, continue to rise due to low vacancy rates<\/strong> and a constrained housing <\/a>supply. The ABS highlighted that Commonwealth Rent Assistance <\/strong>(CRA) adjustments helped offset rent increases, but without these subsidies, annual rent inflation would have reached 7.8%.<\/strong><\/p>\n\n\n\n

Underlying inflation, a measure that excludes volatile price movements, remains above the RBA\u2019s 2-3% target range<\/strong>. The trimmed mean, a key metric for core inflation, stood at 3.2% <\/strong>annually, indicating ongoing price pressures in essential services.<\/p>\n","protected":false},"excerpt":{"rendered":"

Australia\u2019s inflation rate has dropped to 2.4%, marking its lowest level since 2021. Energy price relief and falling fuel costs played a key role in the slowdown. However, rents, insurance, and healthcare costs continue to rise. Despite the headline decline, financial pressures remain for many households.<\/p>\n","protected":false},"author":10,"featured_media":100812,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-100806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=100806"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100806\/revisions"}],"predecessor-version":[{"id":100816,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/100806\/revisions\/100816"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/100812"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=100806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=100806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=100806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}