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Australia’s Consumer Price Index rose 3.8 percent in the year to December 2025, up from 3.4 percent in November, marking a significant acceleration in inflation pressures across the economy, according to data released Tuesday by the Australian Bureau of Statistics.

Housing costs drove the annual increase, rising 5.5 percent and representing the largest contributor to inflation. Within that category, electricity prices surged 21.5 percent over the 12 months, primarily reflecting the depletion of state government rebates in Queensland and Western Australia that had previously cushioned household bills.

“The 3.8 percent annual CPI inflation to December was up from 3.4 percent to November,” said Michelle Marquardt, ABS head of prices statistics.

Food and non-alcoholic beverages rose 3.4 percent annually, with beef and lamb prices each climbing more than 10 percent due to strong overseas demand for Australian red meat. Weather-related shortages pushed vegetable prices up 3.8 percent, while reduced apple supply contributed to a 4.2 percent increase in fruit costs.

Recreation and culture inflation reached 4.4 percent, propelled by domestic holiday travel and accommodation prices that jumped 9.6 percent annually. December saw an 8.2 percent monthly spike in travel costs driven by Christmas demand, school holidays and major events including the Ashes cricket series.

Rental inflation showed modest easing to 3.9 percent from 4 percent, attributed to stable vacancy rates in most capital cities. The Trimmed mean measure of underlying inflation rose to 3.3 percent from 3.2 percent in November.

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