In February 2025, the Australian private survey of inflation recorded a month-on-month decrease of 0.2%, compared to the previous increase of 0.1%. Year-on-year, inflation stands at 2.2%, down from 2.3%, remaining below the Reserve Bank of Australia’s target range of 2-3%.
The trimmed mean, a core inflation indicator, also fell by 0.1% month-on-month, marking the first decline since August 2021. Yearly figures for the trimmed mean remain unchanged at 2.3%. The Reserve Bank of Australia is expected to maintain its current position during the upcoming meeting at the end of the month.
This latest inflation data confirms that price pressures in Australia are continuing to ease. A monthly drop of 0.2% follows a slight increase the month before, reinforcing the trend of softening inflation. On a yearly basis, the 2.2% reading remains below the Reserve Bank’s target range, showing no indication that broader inflationary pressures are picking up.
A closer look at the trimmed mean, which strips out volatile price movements, suggests a similar pattern. The 0.1% monthly decline is the first in over three years, highlighting that even core price pressures are weakening. Meanwhile, the annual trimmed mean remains unchanged at 2.3%, which implies that while inflation is slowing, it has yet to retreat further.
With this in mind, the Reserve Bank is unlikely to shift its stance at the upcoming policy meeting. There is little justification for any adjustment when inflation remains within range and underlying price trends are flattening. We must acknowledge that recent data does not present any pressing need for immediate changes.
Looking beyond the central bank’s decision, traders who have been positioned for a sudden adjustment will need to reassess their expectations. This report suggests that current policy settings will stay in place for now, reducing the likelihood of abrupt market reactions.
All of this reinforces the idea that inflationary concerns are becoming less pressing in Australia. If this trend continues over the next few months, markets will need to consider how the Reserve Bank might respond later in the year.
