Australia Inflation Gauge Extends Decline

Australia’s Melbourne Institute Monthly Inflation Gauge fell 0.4% month-on-month in June 2026, following a 0.3% decline in the previous month and marking its second consecutive monthly decrease. It was also the third monthly drop this year, pointing to easing price pressures across a broad range of goods and services. Recent data showed annual inflation slowed to 4.0% in May from 4.2% in April, as automotive fuel prices rose at a slower pace following the reduction in the fuel excise. Despite the moderation, inflation remained well above the central bank’s 2–3% target range, with underlying price pressures expected to strengthen in the June quarter.

Australia’s Melbourne Institute Monthly Inflation Gauge fell 0.3% month-on-month in May 2026, reversing a 0.6% increase in the previous month and marking the first decline since February. The decline reflected easing price pressures across a range of goods and services, after recent data showed the annual inflation rate slowed to 4.2% in April from 4.6% previously, as automotive fuel prices rose at a softer pace following the reduction of the fuel excise. However, inflation remained well above the central bank’s 2–3% target range, suggesting underlying price pressures are still elevated despite the recent moderation.

Australia’s Melbourne Institute Monthly Inflation Gauge rose 0.6% month-on-month in April 2026, easing from a record 1.3% surge in the previous month but marking a second straight monthly increase. The latest reading suggested inflation has moderated compared to last year, though underlying pressures remain, partly reflecting renewed cost strains since the second half of 2025. The Reserve Bank of Australia has already raised interest rates by 25 basis points in both February and March, bringing the cash rate to 4.1%. It is widely expected to tighten policy further in May. Meanwhile, annual inflation accelerated to 4.6% in March 2026 from 3.7% previously, the highest since September 2023 and still well above the central bank’s 2–3% target band.