Australian inflation keeps plateauing – and the RBA is concerned

Inflation has been stubborn across developed markets lately, and Australia is no exception. Our nowcast is showing that Australian inflation held at an above-target 3.5% year-on-year pace in April following an unwelcome acceleration in March.

Our chart tracks the nation's consumer price index (CPI) against CEIC's proprietary nowcast and adds the Reserve Bank of Australia's rate hikes since mid-2022. So much for the global rate-cutting cycle that once seemed certain for 2024: earlier this month, the RBA raised its outlook for headline inflation and ruled out any chance of easing until well into 2025; it might even hike again.

If you are a CEIC user, access the story here.

For the first three weeks of May, our nowcast is once again suggesting that progress to the target inflation band remains elusive: inflation remains at a 3.5% annualized pace.

Our weekly inflation nowcasts for emerging and developed markets use a comprehensive machine-learning model that deploys high-frequency and alternative data indicators. This gives CEIC users a timely edge: the Australian Bureau of Statistics is not scheduled to publish official April CPI figures until May 29th.

We also demonstrate the influence of different factors on our estimates at any given point in time. For an examination of the underlying factors influencing our Australian inflation nowcast, we invite CEIC users to click here for our dashboard.