In November, Australia’s annual Consumer Price Index (CPI) inflation rose to 2.3%, up from 2.1% in October. The timing of electricity rebates contributed to this increase, as electricity prices fell by 21.5% over the year to November compared to a 35.6% drop in October. However, trimmed mean inflation, which excludes volatile items, dropped from 3.5% to 3.2%, aligning more closely with the Reserve Bank of Australia’s (RBA) target range of 2–3%.
The main factors driving the annual CPI increase were:
These gains were partially offset by lower electricity and fuel prices, with fuel dropping over 10% due to government subsidies.
Treasurer Jim Chalmers acknowledged progress in reducing underlying inflation but refrained from speculating on when the RBA might cut the cash rate, which has remained at 4.35% since November 2023. Major banks predict the first rate cut could occur between February and May 2025. The December quarter CPI data, due on January 29, will play a key role in shaping future rate decisions.
The RBA’s next meeting is in mid-February. While recent data has increased the chances of a rate cut, some economists urge caution, emphasizing the importance of upcoming economic indicators.
