A surprise drop in inflation in May has strengthened speculations about a pause on the Reserve Bank of Australia’s (RBA) aggressive interest rate hiking cycle.
However, it is still too early to conclude that inflation has been successfully tamed.
According to the Australian Bureau of Statistics (ABS), the monthly CPI (consumer price index) plunged from 6.8 percent in April to 5.6 percent in May.
The latest inflation figure was well below the 8.4 percent peak in December 2022 and caught markets and economists off-guard.
“This month’s annual increase of 5.6 percent is the smallest since April last year,” ABS head of prices statistics Michelle Marquardt said….