In Australia, inflation is measured by the Consumer Price Index (CPI), which tracks the average price changes of a basket of goods and services commonly consumed by households. This basket includes items such as food, housing, transportation, and clothing.

The Australian Bureau of Statistics (ABS) collects data on the prices of thousands of items from various stores and service providers across the country. They then use this data to calculate the CPI, which is a measure of the percentage change in the overall cost of the basket of goods and services over time.

The CPI is typically reported as an annual percentage change, which shows how much prices have increased or decreased compared to the previous year. For example, if the CPI increased by 2% in a given year, it means that the cost of the basket of goods and services has gone up by 2% compared to the previous year.

The CPI is an important indicator of inflation because it reflects changes in the cost of living for households. It is also used by policymakers to set monetary policy, such as adjusting interest rates, to help control inflation and promote economic stability.

As of February 2023, the Australian inflation rate is running at a whopping 6.8%. Everyone is aware of the rising cost of living … it’s evident everywhere. One of the very few levers the Government, or it’s agent, the Reserve Bank has to pull, is official interest rates. And that’s why we have seen continuous interest rate rise for almost a year ie. in a bid to slow spending/slow inflation.

Inflation effects all businesses. If you need guidance on how you and your business should respond to the inflationary pressures, book in an appointment with us at Infuse today.