Australia Inflation Steady At 2.5%

(RTTNews) - Australia's consumer price inflation unexpectedly remained unchanged in January supporting the case for further monetary policy easing.

The consumer price index registered a steady growth of 2.5 percent in January, data from the Australian Bureau of Statistics showed on Wednesday. Prices were expected to climb 2.6 percent.

The annual trimmed mean inflation was 2.8 percent in January, which was up from 2.7 percent in December.

Excluding volatile items and holiday travel, the CPI measure rose to 2.9 percent from 2.7 percent in December.

The largest contributor to the inflation was 3.3 percent rise in food and non-alcoholic beverages prices. This was followed by a 2.1 percent rise in housing and a 6.4 percent surge in alcohol and tobacco prices.

Meanwhile, auto fuel prices dropped 1.9 percent from a year ago, sharper than the 1.4 percent fall seen in December.

Today's CPI data support the assessment that the Reserve Bank of Australia will be in a position to withdraw some more monetary restriction over the next few months, Capital Economics economist Abhijit Surya said.

The bank is likely to cut rates only twice more this cycle, the economist added. Earlier this month, the RBA had reduced its benchmark rate for the first time since 2020 citing easing upside risks to inflation. The cash rate was lowered by 25 basis points to 4.10 percent.