Australia’s inflation rate is the lowest in three years, dropping to 2.7 percent in August.
A day after the Reserve Bank decided against an interest rate cut due to high inflation, the Australian Bureau of Statistics (ABS) said the monthly Consumer Price Index (CPI) indicator rose by less than three percent in the 12 months to August.
ABS Head of Prices Statistics Michelle Marquardt said: “Annual inflation was 2.7 percent in August, down from 3.5 percent in July, and is the lowest reading since August 2021.”
Ms Marquardt said the top contributors to the annual movement were housing (+2.6 percent), food and non-alcoholic beverages (+3.4 percent), and alcohol and tobacco (+6.6 percent).
She said partly offsetting the annual increases were drops in the costs of electricity and transport.
“Falls in automotive fuel and electricity were significant moderators of annual inflation in August.”
Ms Marquardt said automotive fuel was 7.6 percent lower than August 2023 after price falls in recent months.
She said, for electricity, the combined impact of Commonwealth Energy Bill Relief Fund rebates and State Government rebates in Queensland, Western Australia and Tasmania, drove the largest annual fall in electricity prices on record of 17.9 percent.
“The falls in electricity and fuel had a significant impact on the annual CPI measure this month. When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding automotive fuel, fruit and vegetables and holiday travel, and the trimmed mean can provide additional insights into how inflation is trending,” Ms Marquardt said.
She said CPI inflation, excluding volatile items and holiday travel, was three percent in August, down from 3.7 percent in July, with annual trimmed mean inflation, which excluded both the falls in automotive fuel and electricity, alongside other large price rises and falls, was 3.4 percent in August, down from 3.8 percent in July.
“Both measures of annual underlying inflation in August are the lowest they have been for 2.5 years,” Ms Marquardt said.
