Australia’s CPI Holds Steady at 2.4% in April
Australia’s CPI Holds Steady at 2.4% in April
On May 28, 2025, the Australian Bureau of Statistics (ABS) unveiled its monthly Consumer Price Index (CPI) indicator for April at 11:30 AM AEST, providing a timely snapshot of household inflation across the nation. The year-over-year CPI reached 2.4%, aligning with the previous month’s figure and slightly surpassing market expectations of 2.3%. The trimmed mean, a measure of underlying inflation that excludes volatile items, reached 2.8%, up from 2.7% in the prior month. This release, closely watched by investors and policymakers, underscores the ongoing stability in Australia’s inflation landscape, with key price pressures stemming from housing, food, and alcohol and tobacco sectors.
The monthly CPI indicator, derived as a weighted average of price changes across Australia’s eight capital cities, tracks a basket of goods and services representing household spending patterns. The data released today highlights persistent price pressures in essential categories. Food and non-alcoholic beverages reached a year-over-year change of 3.3%, driven by seasonal rises in fruit and vegetable prices, such as avocados and tomatoes, due to supply constraints. Housing costs, a significant component of the CPI, reached 2.1% annually, reflecting steady rental price growth moderated by increased vacancy rates and Commonwealth Rent Assistance adjustments. Alcohol and tobacco prices reached 6.4% year-over-year, influenced by regulatory taxes and seasonal factors. Meanwhile, declines in electricity prices, which reached a year-over-year drop of 11.5% due to government rebates, and automotive fuel, down 10.2%, helped offset some of the upward pressure on the headline CPI.
The timing of this release on May 28, 2025, is critical as markets assess the Reserve Bank of Australia’s (RBA) next moves. The steady 2.4% CPI figure, within the RBA’s 2–3% target band, suggests inflation remains manageable, though the uptick in the trimmed mean to 2.8% indicates lingering underlying pressures. Analysts note that the RBA, which recently cut interest rates to 3.85% on May 20, 2025, may interpret this data as reducing the likelihood of an immediate further rate cut in July, with some market estimates pointing to a 60% probability of a cut by August. The data’s release coincides with global economic uncertainties, including trade tensions, making it a pivotal moment for gauging Australia’s economic resilience. The next monthly CPI indicator, set for release on June 25, 2025, will provide further insights into whether inflation continues to hold steady or shifts in response to domestic and global factors.
