Annual inflation in Australia slowed more than expected in May, easing pressure on the Reserve Bank of Australia to hike rates further.
Australia’s annual consumer price inflation cooled to 4.0% in May, down from 4.2% in April and below the 4.4% consensus forecast. The print marks the lowest inflation reading since January 2022, signaling a continued easing of price pressures.
Economists had anticipated a modest decline to 4.4%, following April’s 4.2% increase. The softer-than-expected figure suggests inflation may be returning to the Reserve Bank of Australia’s target range faster than previously thought.
Markets are now pricing in a reduced likelihood of further rate hikes, though the central bank has maintained a cautious stance on inflation persistence.