Australia’s consumer price index (CPI) inflation grew less than expected in the fourth quarter, signaling a slowdown but still remaining above the Reserve Bank of Australia’s (RBA) target range.
Data from the Australian Bureau of Statistics showed CPI rose 2.4% year-on-year in Q4, its slowest pace since early 2021, slightly below forecasts of 2.5% and easing from 2.8% in the prior quarter. On a quarterly basis, CPI increased 0.2%, just below expectations of 0.3%.
Trimmed mean CPI, which excludes volatile energy prices, rose 3.2% annually, slightly below estimates of 3.3% but still above the RBA’s 2%-3% target range. Monthly CPI stood at 2.5% in December, up from 2.3% in November, reflecting inflationary pressures from holiday spending.
Despite government subsidies easing energy costs, strong consumer spending on recreation and travel kept underlying inflation elevated. Australia’s robust labor market continues to support demand, preventing inflation from cooling further.
The RBA meets in mid-February, but it has provided no clear signals on rate cuts. The central bank expects inflation to return sustainably within its target only by 2026, indicating that interest rates may remain steady for now.
Markets are watching closely for RBA’s next move as inflation trends remain a key factor in its monetary policy decisions.


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