Australia’s monthly CPI eased more than expected in May, dropping from 2.4% yoy to 2.1% yoy, the lowest level since October 2024 and below forecasts of 2.4% yoy.
Underlying inflation also softened, with trimmed mean CPI falling from 2.8% yoy to 2.4% yoy, reinforcing signs that underlying price pressures are easing across the economy. Excluding volatile items and holiday travel, inflation ticked down slightly to 2.7% yoy from 2.8% yoy.
The largest annual price increases came from food and non-alcoholic beverages (+2.9%), housing (+2.0%), and alcohol and tobacco (+5.9%).
The overall print strengthens the case for additional RBA rate cuts in the second half of the year, particularly as disinflation broadens.
