ABS to introduce a timelier monthly CPI indicator

  • By Zilla Efrat

The Australian Bureau of Statistics (ABS) is planning to launch a new monthly consumer price index (CPI) indicator in October, alongside its regular quarterly CPI release.

Australian statistician Dr David Gruen says the new indicator will provide a timelier guide to inflation in Australia and will be an important tool for policymakers, academics and businesses.

He says the ABS will release an information paper on the new indicator on Tuesday which will outline its design, research findings and monthly data from 2018 to June 2022. Feedback on the paper must be submitted by 13 September 2022.

“The information paper will show how the monthly CPI Indicator can provide an earlier guide to inflation developments, particularly in times of significant change,” says Gruen.

“One important point of distinction with the monthly indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month.”

Gruen says the quarterly CPI will continue to be Australia’s key measure of inflation with the new monthly indicator an aide to this, providing quicker insights.

“The monthly CPI Indicator has been made feasible by using new data sources to reduce data collection costs, particularly scanner data and web-scraping techniques to provide high-frequency data at lower cost,” he says.

“The use of new data sources has seen the ABS generate a range of timely new insights across the economy without asking more of Australian businesses and households.”

Professional accounting body CPA Australia has welcomed the ABS’ decision to introduce a new monthly CPI indicator.

CPA Australia's general manager of media and content, Jane Rennie, says CPA Australia raised the alarm in June that Australian governments, businesses and others were reliant on out-of-date inflation data.

“This is due to Australia’s practice of reporting CPI data quarterly, unlike other advanced economies such as the United States, United Kingdom, Europe and Japan,” she says.

“Quarterly CPI reporting puts Australian governments, regulators and businesses at a distinct disadvantage, especially in economically uncertain times like now. Using quarterly CPI data when the majority of the world receives it monthly is like waiting for a letter in the post when neighbours are receiving updates by phone.”

Rennie says a monthly CPI indicator will enable a clearer understanding of the effects of monetary policy, geo-political tensions, supply chain disruptions and local interventions on prices across the Australian economy. “Australia’s economy will benefit as a result,” she says.

“In a high inflation environment, we need our institutions to be agile and innovative. With this announcement, the ABS has demonstrated its willingness to be responsive to the needs of the community and embrace new lower-cost data sources to deliver monthly updates.”