As new data suggests that the key measure of underlying inflation has been lowered for the first time in three years, it is the first time in three years that it has dropped below 3%.

Title inflation includes the impact of government cost of living policies such as kickbacks - which remained stable at 2.4% in the year as of March.

Crucially, the RCMP's preferred gauge - the pruning amount of average inflation - fell from 3.3% in one year to December to 2.9% in March.

Jim Chalmers said in a press conference on Wednesday that the latest figures are "a strong testament to the progress Australians have made in the economy".

Focusing on Saturday’s election, the treasurer emphasized this: “The market expects four to five additional lower interest rates to be lowered this year, if that would bring hundreds of dollars in mortgages to Australians each month”.

“I didn’t make a prediction about this, but the market is very firm in believing that there are more rates lower along the way and I can’t see anything that these numbers will dramatically change their expectations,” Chalmers said.

The restaurants in February lowered tax rates for the first time in four years, and a strong consensus was reached between economists and investors that the central bank's monetary policy committee would reduce the cash rate from 4.1% to 3.85% at the next two-day meeting from May 19 to 20.

The Australian Bureau of Statistics said the annual increase in the cost of food and non-alcoholic beverages (essentially supermarket goods) was a major contributor to inflation in the year to March, with alcohol and tobacco prices rising by 6.5%.

Data shows that housing costs remain the main driver of inflation.

Even if the trend is favorable, average rental costs have increased by 5.5% over the same period last year: as of December, they climbed 6.4% in the year, this time by nearly 8% in 2024.

The annual increase in the Consumer Price Index was 0.1 percentage point higher than economists’ expectations of 0.1 percentage point, with a consensus forecast of 2.3% at the title level, compared with a base measure of 2.8%.

ABS data showed electricity prices rose 16.3% in the March quarter, as most of Queensland's $1,000 energy rebates were used up late last year, leaving homes with higher out-of-pocket expenses.

With taxpayer-funded Bill Relief standing out, this is a similar story in other states and territories.

Despite this, electricity prices fell 12% from the same period last year, ABS said.