RBA August 2026 Inflation Forecast: What the Outlook Says

Short summary

The Reserve Bank of Australia's August Statement on Monetary Policy says inflation is expected to ease gradually, with both headline CPI and trimmed mean inflation forecast at 2.4% by the June quarter of 2028.

The near-term forecast is still above the RBA's 2% to 3% target range. For December 2026, the RBA forecasts headline inflation at 3.6% and trimmed mean inflation at 3.3%.

These are economy-wide forecasts, not promises about the next cash-rate decision, a lender's mortgage pricing or one household's living costs. The RBA held the cash rate at 4.35% on 11 August 2026 and said future decisions would respond to incoming data and risks.

Use the Inflation Calculator for a purchasing-power scenario. Use the Rate Change Impact Calculator only to test an assumed mortgage-rate change, not to convert an inflation forecast into a rate prediction.

The August inflation forecast

The RBA's forecasts were finalised on 5 August 2026 and published with the 11 August policy decision.

The RBA says inflation is expected to reach the 2.5% midpoint of the target in early 2028. That does not mean inflation must remain outside the 2% to 3% target band until then. The published table has both measures at 2.9% by June 2027 and 2.4% by June 2028.

What changed from the recent inflation peak

The June-quarter outcome was lower than the near-term peak in the RBA's May forecast, which had incorporated high fuel-price and supply-chain uncertainty.

The August outlook still describes inflation as too high. The RBA expects restrictive financial conditions, slower demand growth and easing supply pressures to reduce inflation over time. Forecasts can change when energy prices, the exchange rate, wages, productivity, demand or financial conditions move differently from the assumptions.

This page therefore records a forecast path, not a countdown to a certain result.

Housing and mortgage context

The August Statement says national housing prices had declined 1.6% from their March 2026 peak and demand for new housing loans had eased. It also notes that most of the earlier 2026 cash-rate increases had flowed through to scheduled mortgage payments.

Those observations do not produce a universal home-value or repayment result:

• a national price movement can differ materially from a suburb or property;
• a scheduled mortgage payment depends on the lender, loan rate, balance, term and repayment type;
• a fixed-rate loan may not reprice until the fixed period ends; and
• an offset balance, redraw or extra repayment changes the household's actual interest path.

For a price scenario, use the Property Value Change Calculator. It is not a valuation. For a confirmed loan-rate change, use the Mortgage Repayment Calculator with the retail rate shown by the lender.

A purchasing-power example

Suppose a household expense is $2,000 a month today. If it rose at 3.6% for one year, the same basket would cost about:

$2,000 x 1.036 = $2,072 a month

If it instead rose at 2.4%, the result would be about $2,048. The $24 monthly difference illustrates the arithmetic between two assumed inflation rates.

It is not a forecast for that household's rent, mortgage, insurance or grocery bill. CPI is a weighted national measure and individual spending patterns differ.

What the forecast does not tell borrowers

The August forecast does not determine:

• the next cash-rate move;
• when a lender will change a home-loan rate;
• whether a loan application will be approved;
• what a property is worth;
• whether a household should refinance; or
• the inflation rate for one person's budget.

Read the August RBA decision and mortgage impact for the current cash-rate outcome. Keep the policy decision and forecast analysis separate: the decision is a current setting, while the forecast is conditional and uncertain.

What remains uncertain

The RBA identifies risks in both directions. Inflation can stay higher if demand, costs or expectations are stronger than assumed. It can fall faster if activity and labour-market conditions weaken more sharply.

The next Statement on Monetary Policy is due with the November 2026 meeting. Between Statements, monthly and quarterly data can change the assessment.

Sources

• RBA: August 2026 Statement on Monetary Policy, published 11 August 2026 and checked 13 August 2026.
• RBA: August 2026 Statement overview, including forecasts finalised on 5 August. Checked 13 August 2026.
• RBA: Monetary Policy Decision, 11 August 2026, including the 4.35% hold and conditional policy guidance. Checked 13 August 2026.

General information disclaimer

This article provides general information about published RBA forecasts and simplified indicative calculations. It is not financial advice, credit advice, a rate forecast, a property valuation, a lender quote, an approval or a recommendation. Forecasts are uncertain and actual household costs, rates and property outcomes may vary.

Last updated: 13 August 2026.