The latest monthly Consumer Price Index (CPI) indicator has shown a rise of 2.4 per cent in the 12 months to February 2025, slightly down from the 2.5 per cent recorded in January 2025, the Australian Bureau of Statistics (ABS) has shown.
According to the ABS, the main drivers of the annual movement were alcohol & tobacco (6.7 per cent), food & non-alcoholic beverages (3.1 per cent), and housing (1.8 per cent).
Michelle Marquardt, ABS head of prices statistics, said: “Annual trimmed mean inflation was 2.7 per cent in February 2025.
“This was down slightly from the 2.8 per cent inflation in January and has remained relatively stable for three months.
“The CPI excluding volatile items and holiday travel measure rose 2.7 per cent in the 12 months to February, compared to a 2.9 per cent rise in the 12 months to January.”
Looking specifically at annual housing inflation, February’s reading showed a drop from the previous month’s figure of 2.1 per cent.
Additionally, rents rose 5.5 per cent in the 12 months to February, down from the 5.8 per cent rise in January, marking the lowest annual growth in rental prices since March 2023, which according to the ABS, is consistent with increased vacancy rates across most of Australia’s capitals.
New dwelling prices also slowed to 1.6 per cent from 2 per cent in the 12 months to January, marking yet another low in annual growth, this time since May 2021, as “project home builders offered discounts and promotional offers to entice businesses”, the ABS said.
However, according to the ABS, the drop in annual housing inflation was driven by declining electricity prices, largely due to the timing of payments of the Commonwealth Energy Bill Relief Fund rebates in Victoria.
“Electricity prices fell 13.2 per cent in the 12 months to February, compared to an 11.5 per cent annual fall to January. Excluding all Commonwealth and State government rebates, electricity prices would have fallen 1.2 per cent in the 12 months to February,” Marquardt said.
Callam Pickering, APAC economist at global job site Indeed, said: “Annual inflation sits comfortably within the RBA’s target, suggesting that the wait for another rate cut won’t be long.
“Nevertheless, staying within that target may prove challenging, given uncertainty around trade and the global economy.”
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