Australia

Australia's Inflation Drops to 2.4% in February

MAR 26 2025·Updated APR 28 2025

Story

Above: Shoppers queue for an elevator at the parking lot at Paddy's Markets in Sydney, Australia. Image credit: Brent Lewin/Contributor/Bloomberg via Getty Images

The Facts

Australia's monthly Consumer Price Index (CPI) decreased to 2.4% in February from 2.5% in January — reportedly due to declining power prices — ahead of the Reserve Bank of Australia's rate meeting in April.
ABC
Dailytelegraph
Reuters
The drop in inflation comes as the trimmed mean, the Reserve Bank's preferred measure of price growth, declined by 0.1% to 2.7%. Food and non-alcoholic beverages rose by 3.3%, while housing increased by 2.1%.
Bloomberg.com
The Canberra Times
Expectations of 25 basis points rate cuts in May and August reportedly lifted the S&P/ASX 200 index 0.7% to 7,999 points, its highest since March 7. Meanwhile, the Australian dollar traded at 0.07% against the US dollar.
Finimize
FXStreet
Australia's big four banks — ANZ, Commonwealth Bank, Westpac, and NAB — closed higher on Wednesday. Meanwhile, Tuesday's budget papers indicated the CPI could rise by 2.5% in the year to June.
The Sydney Morning Herald
Australian
The Treasury expects inflation to hit 3% by mid-2026. Through the year up to February, the top contributors to inflation were food and non-alcoholic beverages, housing, and alcohol and tobacco, respectively rising 3.3%, 2.1%, and 6.4%.
Australian
The Sydney Morning Herald
Meanwhile, the Anthony Albanese government's recent tax cuts and cost-of-living efforts are expected to stimulate growth. The central bank, however, has cited the problematic job market as a reason to persist with price pressures.
Finimize
Australian

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

Australia's cooling inflation signals hope on the economic horizon and suggests the nation might gracefully navigate its economic challenges. The latest data offers relief to mortgage holders as it hints at potential interest rate cuts and provides optimism for households grappling with recent financial pressures.

Guardian

Narrative B

Despite inflation's gentle descent, Australia faces lingering economic uncertainties. Treasury projections suggest inflation may spike to 3% by mid-2026 as government subsidies wane, and geopolitical tensions, including potential trade barriers, could disrupt the fragile economic recovery. The Reserve Bank remains cautious, signaling that sustainable economic stability is still a delicate work in progress.

Australian

Sky News