Australian CPI data due today – 3 previews

I posted a preview of the May Month inflation data due from Australia on Wednesday, 28 June 2023:

A few ‘what to expect’ from:


  • We expect the monthly CPI indicator for May to show an annual lift of 6.0%, though expected increases in electricity and housing costs pose upside risks thereafter.


  • For the Monthly CPI indicator, we pencil in 5.9% YoY from 6.8% as base effects from fuel price drive the headline lower. and a 6.1 median. The magnitude of the drop is likely to paint an overly rosy picture of the pace of disinflation given it is base effect driven and we expect the full Q2 CPI on 26 July to print above the May Indicator. The excl. fuel, fruit/veg, and travel number is likely to show much less moderation from April’s 6.5%.


  • we expect the monthly CPI for May to print at 6.2%/yr. This would see a deceleration in the pace of annual growth from 6.8%/yr in April.
  • Anything below this 6.3%/yr level should provide some comfort to the RBA that the trajectory of inflation is on the right path, and broadly in line with their current inflation forecasts. This could see the risk of a July hike fall, with the RBA likely to favour a hike in August with the benefit of the quarterly CPI report and a refreshed set of economic forecasts.
  • A figure of 6.3%/yr or above tilts the probabilities further in favour of a July rate hike. Although we note that the RBA Board will consider the retail trade printas well as the various housing market data due the day before the Board meeting in their deliberation

Reserve Bank of Australia Governor Lowe

This article was written by Eamonn Sheridan at Source