Synopsis
Australia's inflation rate has significantly decreased to its lowest level in over three years, with the Consumer Price Index rising by 2.4% in the year ending December 2024. This marks a notable decline from recent peaks, signaling potential future interest rate cuts by the Reserve Bank.Key Takeaways
- Inflation Rate: 2.4% as of December 2024.
- Lowest Rate: Since March 2021.
- Treasurer's Statement: Indicates substantial progress.
- RBA's Target: Between 2-3%.
- Interest Rate Decision: Expected in February 2025.
Canberra, Jan 29 (NationPress) The inflation rate in Australia has dropped to its lowest point in over three years, according to newly released official data.
As per the statistics shared by the Australian Bureau of Statistics (ABS) on Wednesday, the Consumer Price Index (CPI)—the primary gauge for inflation—witnessed an increase of 2.4 percent in the year leading up to the conclusion of the quarter in December 2024, down from 2.8 percent in the previous year ending in September.
This is the lowest inflation rate recorded for any 12-month span since March 2021, when it was just 1.1 percent, and represents a significant decline from the peak of 7.8 percent observed in December 2022.
Treasurer Jim Chalmers expressed on social media that these numbers indicate “notable and ongoing progress in combating inflation.”
He further noted that the current headline inflation rate is comfortably within the 2-3 percent target range established by the Reserve Bank of Australia (RBA), the country’s central banking authority.
The ABS also reported that the annual trimmed mean inflation, which removes volatile price fluctuations and is favored by the RBA as a measure of core inflation, stood at 3.2 percent for the year ending December, down from 3.6 percent in September, marking the lowest level since December 2021.
Initially, the RBA had anticipated the underlying inflation to be at 3.4 percent for the December period, while the Australian Broadcasting Corporation (ABC) indicated that economists were projecting it to be around 3.3 percent.
Cherelle Murphy, Chief Economist at Ernst and Young (EY) Oceania, mentioned in an interview with ABC that these latest figures are the strongest indication yet that the RBA Board of Governors may consider lowering interest rates in their upcoming meeting, as reported by Xinhua news agency.
The RBA has maintained the cash rate target at 4.35 percent since November 2023 and has not enacted an interest rate reduction since November 2020.
The RBA Board is set to make a decision regarding interest rates at their first meeting in February 2025.
