Australian inflation rate dips to 4% in May
Sydney (24 June)
Australia’s annual consumer inflation rate reached 4% in May, down from 4.2% in March, largely because of a drop in fuel prices, data from the Australian Bureau of Statistics (ABS) show.
But its annual trimmed mean inflation rate – which excludes the largest positive and negative inflation contributors – rose from 3.4% in April to 3.6% to May, ABS data released on 24 June show. Australia’s annual trimmed mean inflation rate last hit 3.6% in September 2024.
Fuel prices increased by 7.7% on the year in May, down from 19% in April, largely because of Australia’s reduced fuel excise rate and a drop in Brent crude futures prices over the second half of the month.
Brent crude futures traded at $94.98/barrel (A$137.69/barrel) on 1 June, down from $108.17/barrel on 1 May, data from Trading Economics show. Futures prices have declined further in recent weeks, largely because the US and Iran signed an initial peace deal on 15 June.
Brent crude futures last traded at $73.57/barrel on 24 June, just $0.70/barrel above pre-Iran war levels. But retail petrol costs dropped below pre-Iran war levels in six of Australia’s eight territorial capitals over the week to 10 June – before the US and Iran announced their initial peace deal – according to the Australian Competition & Consumer Commission (ACCC).
Australian electricity prices rose by 21% on the year in May, down slightly from 23% in April, ABS data show. Electricity was the largest contributor to Australia’s annual goods inflation rate of 4.2% in June.
The ACCC and Australian Energy Regulator (AER) will advise Energy Minister Chris Bowen on electricity pricing structures because he raised concerns about electricity inflation last week.
“[ACCC] will work with the energy regulator to provide … advice [about electricity pricing] … We will draw on [customer and retailer pricing data] to understand the impact of changes in electricity pricing on consumers,” an ACCC spokesperson told Lithos on 24 June.
By Avinash Govind