Australia's headline CPI rose 0.7 per cent in the September quarter, for an annual rate of 2.8 per cent, the Australian Bureau of Statistics (ABS) said on Wednesday.
The figures were less than economists had predicted.
"Today's inflation figures show that both CPI inflation and underlying inflation in Australia have continued to moderate," Mr Swan told reporters in Canberra.
Mr Swan said underlying inflation - at 2.4 per cent - had returned to around the middle of the Reserve Bank's preferred target band.
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"This is the lowest underlying inflation rate in five years," he said.
Mr Swan said there were challenges ahead for the economy which was why the government was moving to build capacity by investing in infrastructure and cutting business taxes.
The rising Australian dollar was helping to moderate price pressures which would be more fully reflected in subsequent inflation data.
"The higher dollar does make it harder for some businesses in trade-exposed sectors," Mr Swan said.
"It also does mean lower prices for consumers and cheaper capital equipment for businesses."
The treasurer acknowledged the latest data showed many Australians were still doing it tough, especially with higher utility bills.
"That is very clear in the figures today and they putting further pressures on family budgets," he said.
