FX.co ★ Australia Inflation Expectations Little Changed in May

In May 2025, consumer inflation expectations in Australia were recorded at 4.1%, showing a slight dip from the 4.2% observed in the preceding month. This recent statistic suggests that global policy uncertainties may impact domestic economic growth, though their effect on inflation remains unclear. Governor Michele Bullock of the Reserve Bank has emphasized that managing inflation remains a significant challenge, with the central bank's objective being its return to the midpoint of the 2%–3% target range. She also highlighted ongoing concerns about cost-of-living pressures affecting many households. In March, Australia's monthly Consumer Price Index (CPI) increased by 2.4% year-on-year, maintaining the rate from February and marking the lowest level since November. Annual inflation was also steady at 2.4% in the first quarter of 2025, matching the fourth quarter of 2024, and registering a four-year low. Meanwhile, the trimmed-mean CPI — which indicates core inflation — rose by 2.9%, the lowest since the last quarter of 2021 but still above the Reserve Bank of Australia's target. As anticipated, at its April meeting, the RBA maintained the cash rate at 4.35% for the tenth consecutive session.