Shoppers and pedestrians walk past a Shiels store at Rundle Mall in Adelaide, Australia, on Thursday, Feb. 11, 2021.
James Bugg | Bloomberg | Getty Images
Australia’s first-quarter inflation rose 2.4% compared to the same period last year, staying at a four-year low.
This was higher than the Reuters expectations of a 2.3% climb, and unchanged from the 2.4% rise in the previous quarter.
Data from the Australian Bureau of Statistics said that the most significant price rises this quarter were in housing, education, as well as food and non-alcoholic beverages.
This was partially offset by falls in the prices of recreation and culture activities, as well as furnishings, household equipment and services.
Inflation in the country has largely been softening after hitting a multi-year high of 7.8% since the quarter ended December 2022, with the headline inflation rate declining for seven of the nine quarters since then.
The declining inflation has also afforded the Reserve Bank of Australia room to cut rates to 4.1% from 4.35%, which was its highest level since December 2011.
For 2025, growth in Australia’s economy is expected to pick up and the labor market will remain strong, the RBA said, but also added that “it is unclear what will happen globally.”
In an April 22 note, Commonwealth Bank of Australia senior economist Stephen Wu projected that trimmed mean inflation, which excludes extreme price changes in consumer goods and services, would rise by 0.6% quarter-on-quarter, resulting in a 2.8% year-on-year increase.
“If the trimmed mean CPI is in line with our forecast (or below), then we consider a rate cut in May is a done deal,” Wu adds.
Trimmed mean inflation in the first quarter rose 0.7% on a quarter-on-quarter basis and 2.9% on an annual basis, slightly higher then Wu’s projections.
The release also comes as Australia gears up for an election on May 3, with all 150 seats in the lower House of Representatives, and 40 of the 76 seats in the country’s Senate up for grabs.
Reuters, citing Newspoll, reported on April 28 that the Labor Party, led by current Prime Minister Anthony Albanese, currently holds a four-point lead over the conservative Liberal-National opposition when votes from smaller parties are redistributed.