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Australia’s inflation tops forecasts at 3.2%, highest in over a year
Children wait outside a supermarket in Canberra, Australia, July 30, 2025.
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Australia’s consumer prices rose 3.2% in the third quarter, the strongest gain in more than a year, the Australian Bureau of Statistics said Wednesday.
The increase exceeded the 2.1% rise seen in the second quarter and was above the 3% forecast by economists polled by Reuters.
The figure also pushed inflation beyond the Reserve Bank of Australia’s 2%–3% target band for the first time since the second quarter of 2024, underscoring the challenge policymakers face in curbing persistent price pressures.
The RBA had cautioned in its September Statement on Monetary Policy that inflation for the quarter could come in “higher than expected,” citing sticky prices in housing and market services.
RBA Governor Michelle Bullock said last month that inflation in those areas was “a little higher than we were expecting,” though she stressed that it did not indicate that inflation was “running away.”
In August, the central bank had forecast that underlying inflation would continue to moderate to around the midpoint of the 2%–3% range, with the cash rate assumed to follow a “gradual easing path.”
Recent headline CPI readings for July and August came in above expectations for both months, at 2.8% and 3% respectively. September’s inflation figures
Australia’s central bank kept its policy rate steady at its last meeting, noting that inflation remained stubborn in some parts of the economy.
The country’s economy outperformed expectations in the second quarter, growing 1.8% from a year earlier, marking the fastest pace of growth since September 2023. It was higher than the 1.6% expected by economists polled by Reuters and the 1.3% seen in the previous quarter.
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