Australia Inflation Slows More Than Expected

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%.

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.