The impact of the Iran war has contributed to a sharp surge in inflation in Australia, according to the first major economic data released since the conflict began.

Headline inflation increased from 3.7 per cent to 4.6 per cent in the year to March. This marks the highest level of headline inflation recorded since September 2023, News.Az reports, citing Australian media.

On a monthly basis, inflation rose by 1.1 per cent, largely driven by higher transport costs, which increased by 9.2 per cent overall.

The rise in transport costs was strongly influenced by a significant spike in fuel prices, which surged by 32.8 per cent as a result of the Iran war. March recorded the largest monthly increase in fuel prices since the current inflation measurement system was introduced in 2017.

Average fuel prices showed sharp increases across all categories, with unleaded petrol rising by 33 per cent, premium unleaded increasing by 30 per cent, and diesel climbing by 41 per cent.

The Reserve Bank’s preferred inflation measure, the quarterly trimmed mean, also rose from 3.4 per cent to 3.5 per cent.

The latest inflation data has strengthened expectations that the central bank may raise interest rates at its May meeting, which would represent the third consecutive rate increase.

The March figures also showed continued pressure in other parts of the economy, with housing inflation rising by 6.5 per cent over the year and electricity prices increasing by 25.4 per cent.

News.Az 

By Nijat Babayev