Australia's consumer price index rose 2.7% in the year leading up to August, according to date from the Australian Bureau of Statistics.
This marks a decrease from the previous month's annual inflation rate of 3.5% and is the lowest figure recorded since August 2021.
Michelle Marquardt, head of prices statistics at ABS, stated, "Annual inflation was 2.7% in August, down from 3.5% in July, and is the lowest reading since August 2021."
Key contributors to the annual CPI increase include housing, which rose 2.6%, food and non-alcoholic beverages at 3.4%, and alcohol and tobacco seeing a significant increase of 6.6%. However, these gains were partly offset by a 1.1% decrease in transport.
Automotive fuel and electricity prices were substantial moderating factors in the inflation figures for August. Automotive fuel prices dropped by 7.6% compared to August 2023, following recent price declines.
Electricity prices saw a remarkable 17.9% decrease, attributed to the Commonwealth Energy Bill Relief Fund rebates and state government support in Queensland, Western Australia, and Tasmania, marking the largest annual decline on record.
"The falls in electricity and fuel had a significant impact on the annual CPI measure this month. When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding automotive fuel, fruit and vegetables, and holiday travel, as well as the trimmed mean, can provide additional insights into how inflation is trending," Marquardt added.
CPI inflation excluding volatile items and holiday travel stood at 3% in August, down from 3.7% in July.
The annual trimmed mean inflation, which removes significant price fluctuations, was recorded at 3.4%, a decline from 3.8% in July.
The housing group increased 2.6% over the past year, a reduction from the 4% rise observed in July.
The group saw falls in electricity prices partly offsetting hikes in rents and new dwelling prices.
Rents increased 6.8% year-on-year, reflecting persistent tight rental markets across major capital cities. New dwelling prices rose 5.1%, as builders continued to pass on elevated costs of labour and materials.
Electricity prices fell 17.9% over the year, the most significant annual drop since the early 1980s.
According to Marquardt, "Commonwealth and state government rebates led to a 14.6% decrease in electricity prices for August, following a 6.4% decline in July. Without the rebates, electricity prices would have risen by 0.1% in August and 0.9% in July."
Automotive fuel prices saw a 7.6% decrease compared to August 2023, reversing an annual rise of 4.0% in July. The average price of unleaded petrol fell from $2 per litre in August 2023 to $1.85 per litre in August.
Annual inflation for food and non-alcoholic beverages reached 3.4% in August, down from 3.8% in July. The main driver of food price increases was the cost of fruit and vegetables, which rose 9.6% in the year to August, compared to 7.5% in July.