Australia's April CPI Inflation Holds at 2.4%, Above Expectations

Australia's April CPI Inflation Holds at 2.4%, Above Expectations

Australia’s annual Consumer Price Index (CPI) inflation rate remained steady at 2.4% in April, unchanged from the previous month, according to data released by the Australian Bureau of Statistics (ABS) on Wednesday.

The figure slightly exceeded market expectations, which had forecast a 2.3% year-over-year increase for April. Despite the modest upside surprise, inflation continues to remain within the Reserve Bank of Australia's (RBA) target range of 2–3%.

According to the ABS, the main contributors to the yearly inflation rate were housing, food and non-alcoholic beverages, and insurance and financial services. On a monthly basis, inflation was also flat, reflecting continued disinflationary pressures in some categories.

The latest data may complicate the Reserve Bank’s policy decisions as it weighs persistent inflationary pressures against a slowing domestic economy. While inflation has moderated significantly from its 2022 peaks, analysts note that certain core components remain sticky.

"The April CPI figures suggest that inflation is proving somewhat more persistent than expected, and the RBA may need to keep rates elevated for longer to ensure price stability," said a senior economist from a major Australian bank.

The next RBA meeting is scheduled for June, and markets will be closely watching for any signals regarding future monetary policy direction in light of the latest inflation print.