Australia Macro Updates

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. Market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. However, this latest release of quarterly CPI for the September 25 quarter marks the last of this series and completes the ABS transition to monthly CPI data. The quarterly CPI as per the latest release on 29th Oct 2025 rose 3.2% y-o-y. The trimmed mean rose 3.0%. Both measures were higher than market expectations. The monthly CPI, rose 3.5% y-o-y in September 2025. The latest monthly print is a sharp acceleration from the 3.0% seen in the previous month of August. The print was also higher than consensus expectations of an increase of 3.1%. The trimmed mean CPI increased from 2.6% to 2.8%. Inflation in Australia had surprised on the upside in the first quarter of 2025. That had caused some realignment of rate cut expectations and accordingly the RBA had held stead at the monetary policy meetings. However relatively soft prints in the second quarter made the RBA cut for the 3rd time in 2025 in the month of August, taking its cash rate to 3.6%. Since then, the RBA has been on a pause with Michelle Bullock expressing her views about the resilience of the Australian economy and continuing price pressures. 

• Australia Quarterly CPI increased 3.2% y-o-y (expected 3.0%; previous quarter 2.1%)

30th Jul 2025

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 31st July 2025, rose 0.7% in 2Q 2025. Over the past 12 months, the CPI rose 2.1%. The latest quarterly print is a sharp slowdown from the 2.4% seen in the previous quarter. The q-o-q increase of 0.7% was also lower than consensus expectations of an increase of 0.8%. The trimmed mean CPI increased 0.6% on a q-o-q basis and 2.7% on a y-o-y basis. This measure was also a step down from the 2.9% seen in the previous quarter. Inflation in Australia had surprised on the upside in the first quarter of 2025. That had caused some realignment of rate cut expectations and accordingly the RBA had held stead at the monetary policy meetings. The latest soft print once again puts rate cuts on the agenda. Tariffs continue to be a headwind for the economy. The latest soft inflation data also needs to be viewed in conjunction with the latest monthly employment release which showed unemployment rate had sharply spiked up from 4.1% to 4.3%. In this backdrop, the latest inflation data provides ammunition for further rate cuts at the RBA

• Australia Quarterly CPI increased 2.1% y-o-y (expected 2.1%; previous quarter 2.4%)

30th Apr 2025

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 30th April 2025, rose 0.9% in 1Q 2025. Over the past 12 months, the CPI rose 2.4%. The quarterly CPI number held steady at 2.4% from the prior quarter after having decelerated significantly in 2024 from 3.8% in 2Q 2024 and 2.8% in 3Q 2024 to 2.4% in 4Q. However, the print for the latest quarter was slightly above expectations of 2.3%. The trimmed mean CPI increased 0.7% on a q-o-q basis and 2.9% on a y-o-y basis. The trimmed mean measure was also slightly higher than consensus expectations. However, this measure, which strips out some of the volatile components including the electricity rebates and automotive fuel, also declined from 3.2% recorded in Q4 2024. Services inflation eased to 3.7% from 4.3% in the previous quarter. Overall, the upside surprise on headline and core inflation further complicate the RBAs task at the upcoming May meeting. Yet, there is also no doubt that the trajectory of core inflation remains downwards. Employment data has been soft in recent months. The Trump tariffs are creating further uncertainty in the economy. In this backdrop, an unexpected quickening of inflation make a rate cut scenario a bit more complex.  

• Australia Quarterly CPI increased 2.4% y-o-y (expected 2.3%; previous quarter 2.4%)

29th Jan 2025

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 29th January 2025, rose 0.2% in 4Q 2024. Over the past 12 months, the CPI rose 2.4%. The quarterly CPI number has decelerated significantly over the past couple of quarters from 3.8% in 2Q 2024 and 2.8% in 3Q 2024. It also came slightly below consensus expectations of an increase of 2.5%. Similar to the previous quarter, electricity rebates provided by the government (from July 2024) were a major contributor to the sharp decline. The trimmed mean CPI increased 0.5% on a m-o-m basis and 3.2% on a y-o-y basis. This measure, which strips out some of the volatile components including the electricity rebates and automotive fuel, also declined from 3.6% recorded in Q3 2024. Services inflation remained elevated at 4.3% but yet was lower than 4.6% recorded in the previous quarter. With most measures of inflation having recorded slight declines over the past couple of quarters, market participants now anticipate a RBA rate cut to be on the immediate horizon. Markets now anticipate an over 80% chance of a rate cut in the Feb RBA meeting.     

• Australia Quarterly CPI increased 2.4% y-o-y (expected 2.5%; previous quarter 2.8%)

30th Oct 2024

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 30th October 2024, rose 0.2% in 3Q 2024. Over the past 12 months, the CPI rose 2.8%. This marks the first time in the past 3 years that Australia’s formal CPI indicator has fallen within the RBA’s target range. Also at 2.8%, the CPI was significantly lower than 3.8% in 2Q 2024. However, it was still significantly above consensus expectations. Also electricity rebates provided by the government were a major contributor to the sharp decline. The trimmer mean CPI came down from 3.9% in Q2 to 3.5% in Q3. Services inflation remained elevated at 4.6% and was in fact higher than the previous quarter. Higher prices for rents, insurance, education and medical were the main contributors to the higher Services inflation. Australia remains an exception amongst most major developed countries on monetary policy. A rate cut in Australia seems to be still far away.    

• Australia Quarterly CPI increased 2.8% y-o-y (expected 2.3%; previous quarter 3.8%)

30th Oct 2024

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 31st July 2024, rose 1.0% in 2Q 2024. Over the past 12 months, the CPI rose 3.8%. While this y-o-y CPI number is a notable reduction from cycle peak of 7.8% recorded in the 4th quarter of 2022, it still remains significantly high for RBAs comfort. Moreover, quarterly inflation rose from 0.6% in 4Q 2023 to 1.0% in 1Q 2024 and stayed at 1.0% in Q2 2024. The monthly indicator has also been displaying stubborn last mile inflation in Australia. Goods and Services inflation, both increased in the 2nd quarter. At 3.2% y-o-y Goods inflation remains higher than pre-pandemic levels. Services inflation also continues to remain stubbornly high, even though it is trending down. Services inflation increased from 4.3% y-o-y in Q1 2024 to 4.5% in Q2. Housing continues to be a key challenge in Australia. Rising new dwelling prices continue to contribute to goods inflation and rental prices contribute to higher services inflation. Rental prices rose 7.3% in the June quarter – down from 7.8% in March but yet much too high. Rental price growth continues to reflect low vacancy rates and a tight rental market. Similarly, within the Services CPI umbrella, insurance premiums (at 14% y-o-y) remain way too high. On the balance, even though inflation in other developed markets has been trending lower, inflation in Australia is proving harder to bring down.   

• Australia Quarterly CPI increased 3.8% y-o-y (expected 3.8%; previous quarter 3.6%)

24th Apr 2024

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 24th April 2024, rose 1.0% in the 1Q 2024. Over the past 12 months, the CPI rose 3.6%. This y-o-y CPI number is a notable reduction from the 4.1% recorded in Q4 2023 and also substantially lower than the peak of 7.8% recorded in the 4th quarter of 2022. While inflation is substantially lower than its peak, it still remains significantly high for RBAs comfort. Moreover, quarterly inflation rose from 0.6% in 4Q 2023 to 1.0% in 1Q 2024. The monthly indicator has also been displaying stubborn last mile inflation in Australia. Goods and Services inflation, both declined in the 1st quarter, with some goods categories recording outright deflation compared to last year. However, even at 3.1% y-o-y Goods inflation remains higher than pre-pandemic levels. Services inflation on the other hand has continued to remain stubbornly high, even though it is trending down. Services inflation stood at 4.3% y-o-y in Q1 2024. Much of the y-o-y inflation was driven by Education, Healthcare, Insurance and Financial Services and Housing. More specifically, housing continues to be a challenge in Australia. Rental prices rose 7.8% in the March quarter. This was the strongest y-o-y rise since March 2009! Rental price growth continues to reflect low vacancy rates and a tight rental market. Similarly, within the Services CPI umbrella, insurance premiums have also continues to accelerate. Insurance premiums rose 16.4% annually, which was the strongest annual rise since 2001. On the balance, even though CPI in Australia is trending down, the latest quarterly report was a hotter-than -expected one.   

• Australia Quarterly CPI increased 3.6% y-o-y (expected 3.4%; previous quarter 4.1%)

31st Jan 2024

Key takeaway: Australia’s quarterly CPI indicator has been the key gauge of inflation in Australia over the years. The Australian Bureau of Statistics commenced a more timely monthly CPI indicator from July 2022. However, market participants pay close attention to the quarterly report as it forms the key base for RBAs monetary policy decisions. The CPI, as per the latest quarterly release on 31st Jan 2024, rose 0.6% in the 4Q 2023. Over the past 12 months, the CPI rose 4.1%. This y-o-y CPI number is lower than 5.4% recorded in the previous quarter and also substantially lower than the peak of 7.8% recorded in the 4th quarter of 2022. While inflation is substantially lower than its peak, it still remains significantly high for RBAs comfort. Goods and Services inflation, both declined in the 4th quarter, with some goods categories recording outright deflation compared to last year. Annual CPI for Services also declined from 6.8% in Q3 2023 to 4.6% in Q4 2023. One of the key aspects to note is that inflation in categories like housing prices, rents, insurance and electricity still remains substantially high at over 5%.  

• Australia Quarterly CPI increased 4.1% y-o-y (expected 4.3%; previous quarter 5.4%)
• Australia Quarterly CPI increased 0.6% q-o-q (expected 0.8%; previous quarter 1.2%)