New data from the Australia Bureau of Statistics shows headline inflation moderated in both monthly and quarterly terms and monthly trimmed mean was steady.
This means that inflation has come in lower than expected, lower than forecast in the Budget or by the Reserve Bank.
This is the third consecutive month where annual headline inflation has moderated.
It’s an encouraging outcome that shows we’ve made progress on inflation since the Budget, even in the face of intense global uncertainty.
The Treasury, the Reserve Bank and others forecast headline inflation to be in the high fours and even five per cent, but today it has come in at 3.9 per cent, and that’s a better outcome in volatile global circumstances.
In the monthly data, headline inflation was 3.8 per cent in the 12 months to June, down from 4.0 per cent in May.
In month‑on‑month terms headline inflation fell again, by 0.1 per cent in the month of June.
In the quarterly data, headline inflation was 3.9 per cent through the year to the June quarter 2026, down from 4.1 per cent through to the March quarter.
In quarterly terms, inflation more than halved in the June quarter.
Headline inflation was 0.6 per cent in the June quarter down from 1.4 per cent in the March quarter.
We already had an inflation challenge in our economy but the war is making it higher than it would otherwise be.
Treasury has warned that the next phase of the conflict could be more challenging for the global economy, with the oil market now more vulnerable.
While the oil price has fallen around 12 per cent since the end of last week, it remains around 22 per cent higher compared to when the conflict started.
The initial impact from the conflict on inflation came from fuel but we see it broadening today in other areas such as dwelling construction costs.
Trimmed mean inflation was steady at 3.6 per cent in the 12 months to June.
In the quarterly data, trimmed mean was 3.6 per cent through the year to the June quarter, compared to 3.5 per cent in the March quarter.
Inflation has gone up since March in most major advanced economies but has come down here.
Inflation remains much lower than we inherited.
When we came to office, headline inflation was north of 6 per cent and rapidly rising, it’s now much lower than that.
Underlying inflation was around 5 per cent but it is now much lower.
We understand people are under pressure which is why we’re rolling out responsible cost of living relief including cutting taxes five times in three ways, cheaper medicines and higher wages.
From this month, more than 14 million Australian taxpayers got another tax cut, the National Minimum Wage increased by 6 per cent, paid parental leave was extended, and around 2.6 million Australians benefitted from regular indexation of social security payment rates and thresholds.
Australia is not immune from global uncertainty, but we’re well placed and well prepared to confront it with faster growth than almost every major advanced economy, booming business investment, low unemployment, solid wages growth and stronger public finances.
We’ve made progress in the economy, but there’s more work to do because people are still under pressure.
That’s why addressing inflation and helping with the cost of living was a big focus of the Budget and it’s a big focus of the government alongside building a more productive and resilient economy.
