Consumer price growth fell well below the Reserve Bank's target band in May.
Inflation fell 0.2 per cent in May, after rising 0.1 per cent in April, according to the Melbourne Institute monthly inflation gauge.
In the 12 months to May, the inflation gauge rose 1.0 per cent, but still remains below the central bank's two-to-three per cent target band.
Melbourne Institute senior research fellow Sam Tsiaplias says consumer prices have now been flat or negative three times in the last four months.
"Inflation excluding volatile items (such as fuel, fruit and vegetables) has also fallen to 1.5 per cent in annual terms," Dr Tsiaplias said.
"Whichever measure happens to be preferred, it is fairly clear that there is a sizeable gap between target and actual inflation."
The May result was triggered by a sharp 4.1 per cent fall in the price of fruit and vegetables.
Non-durable household product prices also fell 2.2 per cent and international holiday travel and accommodation prices were down 1.0 per cent.
However, there were increases in the prices of automotive fuel, which rose 2.4 per cent, and insurance and financial services, which were up 0.7 per cent.
