Australia's May CPI Up 2.1% Year-On-Year

The monthly Consumer Price Index (CPI) indicator rose 2.1 per cent in the 12 months to May 2025, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: 'The 2.1 per cent annual CPI inflation in May was down from 2.4 per cent in April and the lowest since October 2024.'

The largest contributor to the annual movement was Food and non-alcoholic beverages (+2.9 per cent). This was followed by Housing (+2.0 per cent) and Alcohol and tobacco (+5.9 per cent).

When prices for some items change significantly, measures of underlying inflation (like the annual trimmed mean and CPI excluding volatile items and holiday travel) can give more insights into how inflation is trending.

'Annual trimmed mean inflation was 2.4 per cent in May 2025, down from 2.8 per cent in April. This is the lowest annual trimmed mean inflation rate since November 2021,' Ms Marquardt said.

The CPI excluding volatile items and holiday travel measure rose 2.7 per cent in the 12 months to May, compared to a 2.8 per cent rise in the 12 months to April.

*Volatile items are Fruit and vegetables and Automotive fuel

The 2.9 per cent annual inflation for Food and non-alcoholic beverages in May was down from 3.1 per cent in April.

Prices for fruit and vegetables rose 2.8 per cent in the 12 months to May, down significantly from a 6.1 per cent rise in the 12 months to April.

Fruit prices fell 2.7 per cent in the month of May with lower prices for mandarins, oranges, avocados and apples.

Non-alcoholic beverage prices increased 5.2 per cent in the 12 months to May. 'Non-alcoholic beverage prices remain high, with coffee, tea and cocoa prices up by 8.3 per cent over the past 12 months. Higher prices for coffee drove the rise with adverse weather conditions impacting major overseas coffee bean-growing areas,' Ms Marquardt said.

Annual Housing inflation was 2.0 per cent in May, down from 2.2 per cent in April.

Rents rose 4.5 per cent in the 12 months to May, following a 5.0 per cent rise in the 12 months to April. This is the lowest annual growth in rental prices since December 2022, consistent with smaller increases in advertised rents and stable vacancy rates across most capital cities.

New dwelling prices rose 0.8 per cent in the 12 months to May, down from a 1.2 per cent rise in the 12 months to April. This is the smallest annual growth since April 2021 as project home builders offered discounts and promotional offers to entice business.

Electricity prices fell 5.9 per cent in the 12 months to May, compared to a 6.5 per cent fall in the 12 months to April.

'Electricity rebates lower the cost of electricity for households. In Victoria, the impact of these rebates was lower in May than April due to the timing of payments. Without the Commonwealth and State government rebates, electricity prices would have risen 2.0 per cent in the 12 months to May,' Ms Marquardt said.

Automotive fuel prices fell 10.0 per cent in the 12 months to May and are the lowest since September 2022. In monthly terms, fuel prices fell 2.9 per cent in May due to lower global oil prices at that time.

'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,' Ms Marquardt said.

Holiday travel and accommodation prices rose 0.6 per cent in the 12 months to May, following a 5.3 per cent rise in the 12 months to April.

In monthly terms, Holiday travel and accommodation prices fell 7.0 per cent in May, following a 6.0 per cent rise in April. This was driven by Domestic holiday travel and accommodation with a fall in demand following Easter and the April school holiday period.

Insurance prices rose 3.9 per cent in the 12 months to May, after a 7.6 per cent rise in the 12 months to April.

'The annual rate of price increases continued to slow for insurance, particularly for house and motor vehicle insurance. The 3.9 per cent annual increase to May for insurance was well down from the peak of 16.5 per cent to April 2024,' Ms Marquardt said.