Australia CPI March 2026 — What the ABS Data Actually Showed
The Australian Bureau of Statistics released the March 2026 Consumer Price Index on 29 April 2026. Headline inflation came in at 4.6 per cent annually — up sharply from 3.7 per cent in February and the highest reading since September 2023. The result beat most economist forecasts and was the primary driver of the RBA’s decision to raise the cash rate to 4.35 per cent on 5 May 2026.
Here is what the data showed, how it compared to forecasts, and what it means for Australian households heading into the second half of 2026.
Where Inflation Stood in February 2026
The most recent confirmed ABS data is for February 2026:
| Measure | Annual rate | Monthly change |
|---|---|---|
| Headline CPI | 3.7% | 0% (original) / +0.2% (seasonally adjusted) |
| Trimmed mean (underlying) | 3.3% | — |
The three biggest contributors to February’s annual inflation were:
- Housing: +7.2% — driven by electricity costs (+37% out-of-pocket), new dwelling prices, and rents
- Food and non-alcoholic beverages: +3.1% — beef and lamb both up more than 13%
- Recreation and culture: +4.1% — travel, streaming, and leisure costs
Critically, February’s fuel data showed automotive fuel prices falling 7.2% over the year — because the data was collected before the Middle East conflict escalated on 28 February 2026. That figure is now completely out of date.
The March data captures the full impact of the fuel price spike for the first time.
Why March Came In Much Higher
On 28 February 2026, the United States and Israel launched military operations against Iran. The Strait of Hormuz — through which approximately 20% of the world’s oil supply flows — was effectively disrupted within days.
Australian retail petrol prices jumped approximately 50 cents per litre in under a month, rising from around $1.69 to $2.19 per litre on average before the federal government’s excise cut provided partial relief from 1 April. For context, automotive fuel accounts for approximately 3% of the CPI basket, making it a significant but not dominant driver.
The March CPI captures price data collected throughout March — before the excise cut relief arrived on 1 April. This means the full price spike hits the March number cleanly.
What Economists Forecast — and What Actually Happened
| Source | Headline CPI forecast | Trimmed mean forecast | Actual result |
|---|---|---|---|
| Westpac | 4.2% annually | 3.5% annually | Headline: 4.6% ✗ (exceeded) |
| CBA senior economist | Above 4.0% | — | Confirmed |
| SBS/ANU economist McKibbin | Up to 4.8% | — | 4.6% — close |
| ABS confirmed | — | — | 4.6% headline / 3.3% trimmed mean |
The headline result of 4.6 per cent was above Westpac’s forecast of 4.2 per cent, driven by a larger-than-expected surge in transport costs. The monthly CPI rose 1.1 per cent in March — slightly below Westpac’s 1.3 per cent forecast, but still the fastest monthly pace since July 2025. The quarterly CPI rise was 1.4 per cent.
Westpac is the most specific: it forecasts the monthly March CPI indicator rising 1.3% in a single month, with the annual pace of headline inflation peaking at 5.8% in May before the excise cut effects feed through.
Consumer inflation expectations — measured by ANZ-Roy Morgan — soared to 6.9% in mid-March, a record high, reflecting how quickly public sentiment shifted after the fuel price spike.
The Trimmed Mean Is the Number That Really Matters
The RBA does not set policy based on headline CPI. It focuses on trimmed mean inflation — also called underlying inflation — which strips out the most volatile price movements in both directions and gives a cleaner picture of persistent price pressures.
Fuel is classified as a volatile item and is largely excluded from the trimmed mean calculation. This is actually important context: even if headline CPI surges to 4.5% in March driven by fuel, the RBA’s primary concern is whether the trimmed mean is also rising.
The March result delivered a split outcome on underlying inflation. Trimmed mean came in at 3.3 per cent annually — unchanged from February and below Westpac’s forecast of 3.5 per cent. The quarterly trimmed mean rose 0.8 per cent. This was the one piece of data that gave the RBA some comfort — underlying inflation did not accelerate further in March despite the fuel shock.
However, 3.3 per cent remains well above the top of the RBA’s 2–3 per cent target band. The Board noted that while trimmed mean held steady, the fuel shock is generating second-round effects that are likely to push it higher in coming months. The Board ultimately voted 8-1 to raise the cash rate to 4.35 per cent on 5 May, citing the headline acceleration and the risk of second-round inflation effects embedding more broadly.
For the full analysis of the May RBA decision, see RBA interest rates 2026.
If the trimmed mean comes in above 3.5% for March, the case for a May rate hike to 4.35% becomes very strong. If it holds near 3.3%, the Board may pause. The data ultimately confirmed the RBA’s concerns and provided the basis for the May hike.
For the full analysis of what the RBA is likely to do in May, see our RBA May 2026 decision preview.
What High CPI Means for Australian Households
If headline inflation rises to 4–4.5% in March as expected, it means the cost of living is rising at more than double the pace of the RBA’s 2–3% target — and nearly double the rate of wage growth recorded in the December quarter (3.4% WPI).
In practical terms:
- Groceries — food inflation already at 3.1%, expected to accelerate as freight costs pass through. For the detailed breakdown, see our grocery prices guide
- Petrol — already hitting household budgets hard. See our petrol prices guide
- Electricity — already up 37% out-of-pocket with the federal rebates gone. See our electricity prices guide
- Mortgages — if March CPI triggers a May hike, variable rate borrowers will face a third increase in 2026. See our mortgage stress guide
What the ABS Confirmed on 29 April
The ABS released the March 2026 CPI at 11:30am AEST on 29 April 2026. Here is what the confirmed data showed:
| Measure | Result |
|---|---|
| Headline CPI — annual | 4.6% (up from 3.7% in February) |
| Headline CPI — monthly | +1.1% |
| Headline CPI — quarterly | +1.4% |
| Trimmed mean — annual | 3.3% (unchanged from February) |
| Trimmed mean — quarterly | +0.8% |
| Transport (fuel) | +8.9% annually |
| Electricity | +25.4% annually |
| Housing | +6.5% annually |
| Food and non-alcoholic beverages | +3.1% annually |
| Clothing and footwear | +7.1% annually |
ABS head of prices statistics Sue-Ellen Luke noted that the sharp jump in transport costs was the primary driver of the headline acceleration, reflecting the surge in automotive fuel prices following the Middle East conflict. Electricity costs remained 25.4 per cent higher than 12 months ago due to the expiry of government bill relief rebates.
The March release also included the full quarterly data for January–March 2026, which the RBA used directly in its May forecasting models.
Key numbers to watch when the release lands:
- Headline CPI monthly change — a result above 1.0% would be very high by recent standards
- Headline CPI annual rate — watch whether it breaks above 4.0%
- Trimmed mean annual rate — the critical number for the RBA; above 3.5% points strongly toward a May hike
- Fuel contribution — how much of the headline move is fuel vs broader price pressures
- Housing and rents — whether shelter costs continue accelerating.
Updated 7 May 2026 with confirmed ABS data. This article is general information only. Sources: ABS CPI March 2026 | RBA May 2026 decision
