Inflation by term

The next inflation data will come out after the election, so it seems timely to now look at the inflation record since the monetary reforms in the late 1980s.

The graph above shows the total inflation increase from June to June (so June 2020 to June 2023 for the latest). The target is for annual inflation of 2% so below 6% is good. Between 6% and 9% over three years is acceptable and over 9% means you are constantly breaching the agreed upon maximum.

The cumulative inflation in the last three years is greater than the total inflation in nine years from 1990- to 1999 and from 208 to 2017. And that includes a GST increase in 2010 which had compensating tax cuts.

Basically we have never had sustained inflation like this, in the last 30 years. An 18% increase over three years is unprecedented, and of course most people have not had wages go up 18%.

And for those who like to blame it on Ukraine, I share this graph from The Facts: