(RTTNews) - Australia's inflation slowed to a three-year low in August on falling auto fuel and electricity prices, the Australian Bureau of Statistics reported Wednesday.
Annual inflation eased to 2.7 percent in August from 3.5 percent in July. This was the lowest since August 2021 and matched expectations.
CPI inflation excluding volatile items and holiday travel was 3.0 percent in August, down from 3.7 percent in July.
ABS head of prices statistics Michelle Marquardt said government rebates for electricity drove the largest annual decline in electricity prices on record of 17.9 percent.
Automotive fuel was 7.6 percent lower than August 2023 after price falls in recent months.
Annual trimmed mean inflation that excludes both the falls in automotive fuel and electricity, alongside other large price rises and falls, softened to 3.4 percent from 3.8 percent in the previous month.
"Both measures of annual underlying inflation in August are the lowest they have been for 2.5 years," Marquardt said.
The Reserve Bank of Australia will want to see the trimmed mean inflation rate below 3 percent for a couple of months before it even considers easing policy, though it is clear from today's numbers that it is getting closer to that goal, ING economist Robert Carnell said.
On Tuesday, RBA had left its interest rate unchanged at a 12-year high for the seventh straight meeting and vowed not to cut rates in the near-term as returning inflation to target remains the highest priority.
