NO.085

CONSUMER PRICE INDEX – SEPTEMBER QUARTER 2001

The release of the Consumer Price Index (CPI) indicates that inflationary

pressures continue to remain modest. The All Groups CPI increased by 0.3 per

cent in the September quarter 2001, significantly lower than the 0.8 per cent

increase observed in the June quarter.

With the one-off change in the price level of the September quarter 2000 associated

with the introduction of The New Tax System dropping out of the calculation,

the increase in the CPI through the year to the September quarter 2001 was 2.5

per cent – the midpoint of the medium term inflation target band.

The annual rate of inflation has dropped from 6.0 per cent to 2.5 per cent.

Petrol prices declined significantly in the September quarter, falling by

8.3 per cent. Excluding this effect, the CPI rose only modestly in the September

quarter – by around 0.6 per cent – and by 2.8 per cent through the

year.

Price increases occurred across various items in the quarter, including fruit

prices (up 6.3 per cent, as a result of some supply shortages), meat prices

(up 3.0 per cent, reflecting continued very strong world demand for Australian

produce), electricity prices (up 3.0 per cent, largely driven by the end of

the Victorian Winter Power Bonus) and insurance premiums (up 2.7 per cent due

to increases in categories such as motor vehicles and house and contents).

In addition to petrol, price declines were recorded across a range of goods

and services in the September quarter. The price of vegetables fell by 8.3 per

cent, childcare prices fell by 6.4 per cent, and pharmaceuticals declined by

3.6 per cent. Price declines were also observed for numerous other items in

the quarter including clothing and footwear, household furniture and major household

appliances, and audio visual and computing equipment.

CANBERRA

24 October 2001