The Melbourne Institute said its monthly inflation gauge fell in May after two consecutive monthly increases, driven largely by a decline in transport costs, particularly fuel prices, the institute said in a Monday report.
The monthly cost of living also declined in May, particularly for self-funded retirees, the report said.
Annual headline inflation, as measured by the inflation gauge, stood at 4.4%.
The gauge estimates month-to-month price movements for a wide-ranging basket of goods and services across the main capital cities of Australia.