Australia’s inflation rate slowed more than expected in the three months through June, reflecting global trends and bolstering the case for the Reserve Bank to pause again at next week’s policy meeting.
The consumer price index advanced 6% in the second quarter from a year earlier, less than economists’ estimate of 6.2%, Australian Bureau of Statistics data showed Wednesday. The RBA currently expects inflation to return to the top of its 2-3% target by mid-2025.
The easing in prices will be welcomed by Governor Philip Lowe who says the RBA is now in data-dependent mode after raising interest rates 12 times over the past 15 months. Expectations that the result will allow the central bank to stand pat on Tuesday sent the currency lower, while stocks extended gains
Wednesday’s data comes after US consumer prices decelerated to a more than two-year low in June, with key measures of underlying inflation coming in below forecasts. Australia’s CPI reading follows reports suggesting its economy remains resilient, putting the central bank on track to engineer a soft landing while cooling prices.
Australia’s central bank has moved at a more cautious pace than global counterparts, having raised rates by 4 percentage points compared with 5.25 by nearby New Zealand and 5 points by the US.
Federal Reserve policymakers are poised to hike rates to the highest level in 22 years at this week’s meeting.
--With assistance from Tomoko Sato.
