SYDNEY, AUSTRALIA – DECEMBER 6: Pedestrians and shoppers move along George Street on December 6, 2024 in Sydney, Australia.
Lisa Marie Williams | Getty Images News | Getty Images
Australia’s inflation rate rose to 4.09% in the first quarter compared to the same period last year, the highest level in more than two years.
The figure was lower than the 4.2% expected by economists polled by Reuters, but still raised expectations for a rate hike by the Reserve Bank of Australia.
Prices rose 1.4% from the previous quarter. Inflation rose to 4.6% in March, mainly due to rising costs of housing, transportation and food.
The 4.6% figure is the highest since Australia began publishing monthly consumer price index data in 2025.
The statistics will be released ahead of next week’s Reserve Bank of Australia policy meeting. The central bank raised the policy rate to 4.1% at its March meeting, the highest level since April 2025.
“While developments in the Middle East remain highly uncertain, global and domestic inflation could rise further under a wide range of possible scenarios,” the RBA said after its March meeting.
The Governing Council said it expects inflation to remain above the 2% to 3% target for some time.
RBA Governor Michelle Bullock said board members agreed that further rate hikes may be necessary, although they differed on the timing.
According to the minutes of the meeting, policymakers said they believed inflation remained “too high” and that short-term inflation may be necessary.
“Rising oil prices further increased the risk that inflation will remain above target for an extended period,” the meeting minutes said.
Australia’s economy grew 2.6% year-on-year in the fourth quarter, the fastest pace in two years and faster than expected.
