Australia Q2 Inflation Rate Rises to 3.8%, as Expected

Australia’s annual inflation jumped to 4.6% in March 2026 from 3.7% in the prior month, marking the highest reading since September 2023, and staying above the central bank’s 2–3% target, though slightly below market forecasts of 4.8%. Goods inflation picked up (5.5% vs 3.5% in February), due to a sharp rebound in transport costs (8.9% vs -0.2%) as fuel prices surged amid rising oil prices linked to the Middle East conflict. Additional upward pressures came from food (3.1% vs 3.1%), alcohol and tobacco (3.1% vs 4.3%), housing (6.5% vs 7.3%), clothing (7.1% vs 4.9%), furnishings (1.4% vs 1.3%), communications (1.4% vs 0.8%), recreation (2.8% vs 4.0%), and financial services (2.8% vs 2.4%). Meanwhile, services inflation eased to 3.6% from 3.9%, partly reflecting lower pharmaceutical costs. The trimmed mean CPI rose 3.3% yoy, in line with expectations. Monthly, CPI accelerated 1.1% after being flat in February, marking the fastest pace since July 2025, but less than estimates of 1.3%.

Australia’s annual inflation edged down to 3.7% in February 2026, compared with market forecasts of 3.8%, which were also in line with the prior two months. However, the latest result remained outside the central bank’s 2–3% target. Goods inflation slowed (3.5% vs 3.8% in January), amid a decline in transport cost, with automotive fuel falling at a steeper rate before the Middle East conflict. (-7.2% vs -2.7%). Also, price growth eased for alcohol and tobacco (4.3% vs 5.0%), clothing (4.9% vs 5.3%), furnishings (1.3% vs 1.4%), communication (0.8% vs 1.4%), and education (4.8% vs 5.4%). In contrast, inflation held steady for food and non-alcoholic drinks (at 3.1%) and financial services (at 2.4%) while accelerating for housing (7.3% vs 6.8%) and recreation (4.0% vs 3.6%). Services inflation stood at 3.9%, unchanged from January. The trimmed mean CPI inched lower to 3.3% yoy, below both the prior figure and consensus of 3.4%. Monthly, the CPI was flat, reversing a 0.4% gain in January.

Australia’s annual inflation held at 3.8% in January 2026, unchanged from the prior month but topped market forecasts of 3.7%, remaining outside the central bank’s 2–3% target. Services inflation eased to 3.9% from December's two-year high of 4.1%, partly due to lower pharmaceutical prices after the cut in the standard medicine fee. Meanwhile, goods inflation accelerated (3.8% vs 3.4%), driven by a sharp rise in electricity costs (32.2% vs 21.5%) as state rebates expired. Price growth stayed broad-based, with continued rises in food and non-alcoholic drinks (3.1% vs 3.4%), alcohol and tobacco (5.0% vs 4.9%), clothing (5.3% vs 3.4%), housing (6.8% vs 5.5%), furnishings (1.4% vs 2.0%), transport (1.1% vs 1.6%), communication (1.4% vs 1.1%), recreation (3.6% vs 4.4%), education (5.4% vs 5.4%), and financial services (2.4% vs 2.5%). The trimmed mean CPI edged up to 3.4% yoy, above both the prior figure and consensus of 3.3%. Monthly, the CPI rose 0.4%, slowing from a 1.0% gain in December.