FX.co ★ Australia Inflation Slows More Than Expected

Australia’s annual inflation rate slowed to 4.2% in April 2026, down from 4.6% in March and below market expectations of 4.4%. Despite the deceleration, inflation remained above the Reserve Bank of Australia’s 2–3% target range. Goods inflation eased to 4.7% from 5.5%, driven in part by a moderation in transport costs, which rose 6.6% compared with 8.9% in March. This reflected a slower increase in automotive fuel prices following the reduction in the fuel excise, from 52.6 cents per litre to 20.6 cents per litre on April 1.

Price pressures also softened for food and non-alcoholic beverages (2.8% vs 3.1%) and housing (6.3% vs 6.5%). Services inflation edged down slightly, to 3.5% from 3.6%. Meanwhile, the trimmed mean CPI rose 3.4% year-on-year, its highest level since September 2024 and in line with market forecasts, while the weighted median CPI held steady at 3.5%. On a monthly basis, consumer prices increased 0.4% in April, a sharp slowdown from the 1.1% rise recorded in March, which had been the strongest monthly gain in seven months.