Prices rose by 3.4% in the 12 months to February 2024, new figures from the Australian Bureau of Statistics show.
It matches inflation figures from January and the final quarter of 2023, when the ABS announced the smallest annual price increase since November 2021.
Consecutive months of steady inflation figures do not mean prices are falling — it means prices are increasing at a slower rate than they did previously.
Rising prices: the figures
Rent was one of the only areas where inflation rose compared to January. Fuel and insurance were also up.
Rent prices rose 7.6% in the year to February, which the ABS attributed to “strong demand for rental properties and tight rental markets”.
Rising prices were also driven by the increased cost of housing (up 4.6%) and alcohol and tobacco (up 6.1%) in the 12 months to February.
Changing prices
Products and services prone to price fluctuations, like petrol, holiday travel, fruit and vegetables, are a key influence on the inflation rate.
To account for this, the ABS releases a separate inflation figure that excludes these goods.
This figure showed a 3.9% price rise in the 12 months to February, down from 4.1% in January.
Does it matter?
Inflation is a key consideration for the Reserve Bank of Australia (RBA) when it determines changes to the cash rate — the interest rate it charges commercial banks for short-term loans.
Over the past two years, the RBA has announced several consecutive interest rate rises to fight rising prices (inflation). However, it hasn’t raised the cash rate since November.
The current cash rate is 4.35%. It was 0.10% at the start of 2022.
