Perth, March 25: Consumer prices in Perth rose faster than any other capital city in February, highlighting ongoing cost-of-living pressures in Western Australia, according to new inflation data and economist analysis.
The latest Consumer Price Index figures from the Australian Bureau of Statistics show inflation remains elevated nationally, with annual CPI rising 3.7 per cent in the 12 months to February 2026.
EY Senior Economist Paula Gadsby said Perth recorded the strongest price growth of any state or territory over the year.
“Perth consumer prices rose by 4.9 per cent in February in annual terms. This was unchanged from January and precedes the impact of the Iran conflict and subsequent rise in global oil prices. Perth experienced the fastest rise in prices of all the state and territories in annual terms, followed by Hobart at 4.0 per cent.”
Gadsby said electricity costs played a major role in pushing inflation higher in Western Australia after government rebates expired.
“WA government electricity rebates continued to impact headline inflation with their expiration contributing to an 11 per cent rise in electricity prices in the month and a 289 per cent rise over the year. Housing inflation continued to rise, up 14.8 per cent in annual terms following the rise in electricity prices. There was also a 6.1 per cent rise in dwelling prices in a tight housing market. Rent inflation eased a little to 5.8 per cent over the year.”
Housing costs remain the biggest contributor to inflation nationwide, with strong demand and limited supply continuing to keep prices high across most capital cities.
Gadsby said underlying inflation measures show price pressures remain persistent even when volatile items are excluded.
“Excluding volatile food and energy costs, Perth prices rose by 3.7 per cent, highlighting persistent price pressures in the West and across the country.”
She warned that global events could add further pressure to inflation in coming months, particularly through higher fuel costs.
“As elevated oil prices flow through the Australian economy, and add to domestic inflation, the Reserve Bank will need to raise interest rates further to ensure inflation does not become entrenched.”
Gadsby said the strength of the labour market gives policymakers room to tighten monetary policy if needed.
“A low unemployment rate and resilient labour market give the Reserve Bank room to fight inflation. But the real challenge will be keeping unemployment from rising too far as consumers and businesses respond to rising fuel prices.”
The Reserve Bank is expected to closely monitor upcoming data releases before making its next decision on interest rates.
“The next quarterly CPI report and further labour market reads will be critical ahead of the May Monetary Policy Board Meeting.”
Gadsby said uncertainty surrounding the Middle East conflict is adding to the difficulty of forecasting inflation and economic conditions.
“The Reserve Bank’s assessment of the inflation outlook is complicated by the uncertainty about the duration of the Iran conflict and the subsequent impact on conditions and confidence for both business and consumers.”
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