Australia Inflation Rate Highest Since 2023

The annual inflation rate in Australia unexpectedly slowed to 4.0% in May 2026 from 4.2% in April, coming in below expectations of 4.4% but remaining above the central bank’s 2–3% target range. It was the softest increase since February, as goods inflation moderated to 4.2% from 4.7%, with transport costs rising at the slowest pace in three months (3.3% vs 6.6% in April) as automotive fuel prices increased at their softest pace since February (7.7% vs 18.6%). Inflation also eased for health (3.8% vs 4.0%) and recreation (2.4% vs 2.5%). Meanwhile, price growth accelerated for food and non-alcoholic beverages (3.3% vs 2.8%) and housing (6.5% vs 6.3%). Services inflation also picked up to 3.7% from 3.5%. Meanwhile, the trimmed mean CPI rose 3.6% yoy, the highest since September 2024 and above expectations of 3.5%, while the weighted median CPI climbed 3.6%, after a 3.5% rise in April. Monthly, CPI fell 0.7%, the first decline since August 2025, compared with expectations of a 0.3% fall.

The annual inflation rate in Australia eased to 4.2% in April 2026 from 4.6% in March, coming in below expectations for a slowdown to 4.4%, but still remaining above the central bank’s 2–3% target range. Goods inflation moderated to 4.7% from 5.5%, with transport costs rising at a slower pace of 6.6% (vs 8.9% in March), as automotive fuel prices increased more slowly following the reduction of the fuel excise from 52.6 cents per litre to 20.6 cents per litre on April 1. Inflation also eased for food and non-alcoholic beverages (2.8% vs 3.1%) and housing (6.3% vs 6.5%). Services inflation also edged lower to 3.5% from 3.6%. Meanwhile, the trimmed mean CPI rose 3.4% year-on-year, the highest since September 2024 and in line with market expectations, while the weighted median CPI increased 3.5%, unchanged from March. On a monthly basis, consumer prices rose 0.4%, slowing sharply from a seven-month high gain of 1.1% in March, and coming in below the expected 0.6% increase.

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%.