FX.co ★ Australia Inflation Rate Eases Slightly

Australia’s annual inflation eased to 3.7% in February 2026, slightly below market expectations of 3.8% and matching the pace seen in the previous two months. Nonetheless, inflation remained above the Reserve Bank’s 2–3% target range.

Goods inflation moderated to 3.5% from 3.8% in January, driven in part by lower transport costs. Automotive fuel prices fell more sharply, declining 7.2% year-on-year compared with a 2.7% drop before the Middle East conflict. Price growth also slowed across several categories: alcohol and tobacco (4.3% vs 5.0%), clothing (4.9% vs 5.3%), furnishings (1.3% vs 1.4%), communication (0.8% vs 1.4%), and education (4.8% vs 5.4%).

By contrast, inflation was unchanged for food and non-alcoholic beverages (3.1%) and for financial services (2.4%), while it picked up for housing (7.3% vs 6.8%) and recreation (4.0% vs 3.6%). Services inflation held steady at 3.9%, the same rate as in January.

The trimmed mean CPI edged down to 3.3% year-on-year, coming in below both January’s reading and the consensus estimate of 3.4%. On a monthly basis, the CPI was unchanged, reversing the 0.4% increase recorded in January.