Inflation in Australia eased in May, with the monthly consumer price index (CPI) rising 2.1% over the year, down from 2.4% in April, according to the Australian Bureau of Statistics (ABS).
This marks the lowest annual CPI increase since October 2024. Underlying inflation also cooled, with Michelle Marquardt, ABS head of prices statistics, noting: “Annual trimmed mean inflation was 2.4% in May 2025, down from 2.8% in April. This is the lowest annual trimmed mean inflation rate since November 2021.”
The CPI excluding volatile items and holiday travel rose 2.7% in the 12 months to May, slightly down from 2.8% in April.
Food and beverage inflation eased, with annual prices rising 2.9% in May compared to 3.1% the previous month.
Fruit and vegetable prices increased 2.8% year-on-year, down sharply from April’s 6.1%. Fruit prices fell 2.7% in May alone, driven by lower costs for mandarins, oranges, avocados and apples.
Non-alcoholic beverage prices climbed 5.2% over the year, led by an 8.3% rise in coffee, tea and cocoa.
“Non-alcoholic beverage prices remain high, with coffee, tea and cocoa prices up by 8.3% over the past 12 months. Higher prices for coffee drove the rise with adverse weather conditions impacting major overseas coffee bean-growing areas,” Marquardt noted.
Fuel prices declined significantly, falling 10% over the 12 months to May, following a fall of 12% in the previous period amid weaker global oil prices.
Electricity prices declined 5.9% in the 12 months to May, slightly less than the 6.5% fall recorded in April. Ms Marquardt noted that without government rebates, prices would have risen 2.0% over the year.
“Across capital cities the average price for unleaded petrol in May was $1.73 per litre. This is 20 cents lower than 12 months ago and significantly below the peak monthly average price of $2.07 per litre in September 2023,” Marquardt said.
Housing-related inflation also softened, with annual housing inflation falling to 2.0% in May from 2.2% in April.
Rents rose 4.5% year-on-year, down from 5.0% the previous month - the slowest annual rental growth since December 2022. The ABS cited smaller advertised rent increases and steady vacancy rates across most capital cities.
New dwelling prices increased just 0.8% over the year, down from 1.2% in April. This is the smallest growth since April 2021, as builders continued to offer more discounts and promotional incentives.
