According to the Australian Bureau of Statistics, Australia’s Consumer Price Index (CPI) increased by 2.4% in the year to February, a slight decline from 2.5% the previous month, remaining within the Reserve Bank's target range.
“Annual CPI inflation was slightly lower in February, after holding steady at 2.5% for the previous two months,” said Michelle Marquardt (pictured), the ABS head of prices statistics.
The data was released just days before the RBA’s upcoming interest rate decision on April 1, which will be the first made under its newly implemented dual-board structure.
Significant price increases were observed in several sectors:
Rents saw an annual increase of 5.5%, a slight decline from the previous year’s rate of 5.8%, marking the lowest annual growth since March 2023.
Meanwhile, the price rise for new dwellings slowed to 1.6% annually, attributed to discounts and promotional offers by builders.
A notable decrease in electricity prices significantly influenced the housing inflation numbers.
“Electricity prices fell 13.2% in the 12 months to February, compared to an 11.5% annual fall to January,” Marquardt said.
This reduction is partly due to the distribution of the Commonwealth Energy Bill Relief Fund rebates in Victoria, which lowered electricity costs for households.
Automotive fuel prices also decreased by 5.5% over the past year, although there was a month-to-month increase of 1.2% in February. This volatility in fuel prices continues to be a critical factor in short-term inflation measures.
Smirk suggested that the current data does not warrant a change in the near-term economic forecasts.
“Based on the data from the February Monthly CPI Indicator, we see no compelling reasons to change our current March quarter CPI estimate: 0.7%qtr/2.2%yr for the headline CPI and 0.5%qtr/2.7%yr for the trimmed mean,” he said.
