KPMG’s latest Australian inflation and cost dynamics report highlights a renewed surge in inflationary pressures, driven by a major global supply shock and persistent domestic cost drivers. The outbreak of conflict in Iran has disrupted global energy markets, sharply lifting fuel prices and pushing headline inflation higher at a time when underlying pressures were already elevated.
While price growth had shown signs of stabilising across several categories, this shock has shifted the outlook for 2026, with further pass-through expected in coming months. At the same time, domestic factors including housing costs, construction activity and wages continue to contribute to inflation momentum, reflecting both ongoing demand and structural constraints.
This edition provides updated forecasts for consumer, producer and wage inflation, alongside insights from KPMG’s Inflation Pressure Gauge, helping to distinguish between demand- and supply-driven pressures and offering a clearer view of how inflation is evolving across the Australian economy.
Australian inflation and cost dynamics – May 2026
Global shocks and domestic forces shaping Australian's inflation outlook.
Inflationary trends
Download: KPMG Australian inflation and cost dynamics
Australian inflation and cost dynamics – May 2026
Global shocks and domestic forces shaping Australian's inflation outlook.
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