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Economists attribute inflation spike to carbon tax

AuBJ – 24 October – The carbon tax appears to have added to inflation this quarter but the Australian Bureau of Statistics (ABS) cannot confirm by how much.

Economists estimate that it has added up to 0.4 per cent to the consumer price index (CPI), a key measure of inflation.

Inflation rose by more than anticipated in the third quarter, to 1.2 in seasonally adjusted terms and 1.4 per cent in non-adjusted terms.

Stephen Walters, chief economist at JP Morgan Australia, said the carbon tax had impacted most on electricity and gas prices, which rose by 15.3 per cent and 14.2 per cent in the three months to September.

Walters estimated that the carbon tax had added 0.3 to 0.4 per cent to the CPI, while Commonwealth Bank of Australia chief economist Michael Blythe said the impact was closer to 0.2 per cent.

“This outcome suggests that the price impact will fall short of earlier Treasury modelling work that put the CPI contribution in 2012/13 at 0.7 percentage points,” he said.