Australia's consumer price index (CPI) rose 3.7% in the 12 months to February, down from a 3.8% increase in the year to January, the Australian Bureau of Statistics reported Wednesday.

The largest contributors to annual inflation were housing, up 7.2%, followed by food and non-alcoholic beverages, which rose 3.1%, and recreation and culture, which grew 4.1%.

"Trimmed mean inflation was 3.3% in the 12 months to February, unchanged from the 12 months to January," said Sue-Ellen Luke, the bureau's head of prices statistics.

Annual goods inflation was 3.5% in the 12 months to February, down from 3.8% in January, while annual services inflation remained steady at 3.9%, per the report.

Annual housing inflation rose to 7.2% in the 12 months to February, up from 6.8% in the year to January, driven by higher costs for electricity, new dwellings, and rents, while food and non-alcoholic beverages increased by 3.1% over the same period.

Electricity costs rose 37% over the 12 months to February, up from around 32% in the year to January, mainly due to households exhausting the extended Commonwealth Energy Bill Relief Fund and state government rebates, while excluding these rebates, prices rose 4.9%.

Transport costs declined by 0.2% over the 12 months to February, while automotive fuel prices dropped by 7.2% compared to the same period last year.

"Prior to the Middle East conflict, automotive fuel prices fell 3.4% in the month of February, which followed a fall of 3.2% in January," Luke added.