- The Australian monthly Consumer Price Index is projected to register at 2.3% for March.
- Quarterly CPI inflation is anticipated to moderate further, remaining below 3%, with core inflation metrics aligning with the RBA’s target range.
- The Reserve Bank of Australia is scheduled to convene in mid-May to deliberate on future monetary policy adjustments.
- The Australian Dollar is experiencing a slight decline against the US Dollar after recently attaining a new high for 2025.
Australia is poised to release a series of key inflation indicators on Wednesday, with financial markets widely forecasting a continued moderation in price pressures at the start of 2025. This anticipated easing of inflation is expected to bolster the case for further interest rate reductions by the Reserve Bank of Australia (RBA). The central bank’s upcoming monetary policy meeting is slated for May 19-20, where policymakers will assess the latest economic data and deliberate on potential adjustments to the Official Cash Rate.
The Australian Bureau of Statistics (ABS) is set to release two distinct inflation measures: the quarterly Consumer Price Index (CPI) for the first quarter of 2025, providing a comprehensive overview of price movements across a broad basket of goods and services, and the March monthly CPI, which tracks annual price pressures over the preceding twelve-month period. The quarterly CPI report is particularly significant as it incorporates the RBA Trimmed Mean CPI, a key inflation gauge closely monitored by policymakers for its ability to filter out volatile price fluctuations and provide a more accurate representation of underlying inflationary trends. This measure is considered a crucial input in the RBA’s monetary policy decision-making process.
The RBA opted to maintain the Official Cash Rate (OCR) at its current level of 4.10% during its meeting in early April. This decision followed a 25 basis points (bps) rate cut implemented in February, marking the first reduction in the OCR after a series of rate hikes initiated in 2022 to combat rising inflation. Market participants are keenly observing the upcoming inflation data and the RBA’s subsequent policy decisions, as they will provide crucial insights into the trajectory of the Australian economy and the central bank’s strategy for achieving its inflation target of 2-3%. Furthermore, analysts are closely examining global economic conditions and their potential impact on Australia’s economic outlook, including developments in international trade, commodity prices, and the monetary policies of other major central banks.
