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Australia’s Inflation Holds Steady in April; RBA Expected to Maintain Easing Bias
The Australian Bureau of Statistics reported on Wednesday that the Consumer Price Index (CPI) rose 2.4% year-on-year in April, matching March’s figure and slightly exceeding the market forecast of 2.3%. The trimmed mean inflation edged up to 2.8% from 2.7%, while a measure excluding holiday travel and volatile items also increased to 2.8% from 2.6%. All three metrics remain within the Reserve Bank of Australia’s (RBA) 2–3% target range.
As the monthly update captures only part of the full CPI basket—placing more weight on goods than services—financial markets reacted calmly. Goods prices rose just 0.9% compared to a year earlier. The Australian dollar remained near US$0.6440, and three-year bond futures stayed at 96.60, with traders viewing the data as unlikely to deter the RBA’s easing trajectory.
Cherelle Murphy, Chief Economist at EY, stated, “The RBA is likely to proceed with further monetary easing, as inflationary pressures have subsided and global uncertainties persist.”
The RBA recently lowered its policy rate to a two-year low, citing subdued inflation as justification for further supporting the economy amid global trade tensions. The labour market has proven resilient, with employment growth steady and the jobless rate holding at 4.1%. Wage increases remain moderate, limiting inflationary risks.
April saw health costs rise 4.4% following a premium hike by insurers, while holiday travel and accommodation jumped 5.3% due to Easter and school break demand. These increases were partially offset by lower fuel prices.
New Zealand Lowers Rates, Signals Deeper Easing
The Reserve Bank of New Zealand (RBNZ) cut its benchmark rate by 25 basis points to 3.25%, marking a sixth consecutive reduction. The bank indicated a deeper easing cycle, citing U.S. trade policy shifts. Since August, rates have been cut by a cumulative 225 basis points. The RBNZ now projects the cash rate at 2.92% by Q4 2025 and 2.85% by Q1 2026.
