Inflation Expectations in mid-December are at 5.3% – slightly down from the month of November (5.4%)
The latest ANZ-Roy Morgan weekly Inflation Expectations are at 5.3% for the week of December 11-17, 2023 – in line with the four-week average of 5.3% and 0.1% points lower than the month of November.
A look at the monthly Inflation Expectations for November 2023 shows the measure at 5.4% for the month, an increase of 0.1% points on October 2023 (5.3%). In the month of November 2023 Australians expected inflation of 5.4% annually over the next two years. However, since November ended, Inflation Expectations have dropped slightly in the early weeks of December.
A driver of the decline is the drop in the retail price of petrol. See below for additional detail of the impact of petrol prices on Inflation Expectations. In addition, the latest information on weekly Inflation Expectations is available to view each week in the Roy Morgan Weekly Update video on YouTube.
Inflation Expectations are following a similar trend as the broader official inflation measure. The latest ABS monthly CPI estimate for October 2023 showed a decline at 4.9%, down 0.7% points from 5.6% in September 2023, although level with the recent low of 4.9% July 2023.
The lower-than-expected inflation reading for October prompted the RBA to leave interest rates unchanged at their final meeting for the year in early December.
Monthly Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years
Rapid petrol price declines in late November and early December ease inflation pressures
A leading factor driving the decrease in Inflation Expectations in recent weeks has been the declines in the retail petrol price – now at an average of $1.86 per litre in mid-December, down from over $2 per litre in late November.
However, despite the fall, average retail petrol prices in Australia have now been above $1.80 per litre for 23 straight weeks, the longest stretch at this high level ever recorded. The previous record stretch above $1.80 per litre was 13 weeks above this level earlier this year from February – July 2023.
Australian average retail petrol prices (cents per litre) weekly: 2021 – 2023
Inflation Expectations increased in Victoria, Western Australia and Tasmania in November
A look at Monthly Inflation Expectations on a State-based level shows increases in the States of Victoria, Western Australia and Tasmania driving the overall monthly increase.
Inflation Expectations in Victoria were up 0.2% points to 5.3% but were still the lowest of any State. There were also increases in Western Australia, up 0.3% points to 5.4% and Tasmania, up 0.3% points to 5.7% - and now the highest in the country.
Interestingly, Inflation Expectations in Queensland were unchanged at 5.6% and unchanged at 5.5% in New South Wales – with both States still slightly above the national average.
The only State to experience a decline in November was South Australia, down 0.3% points to 5.5%.
Inflation Expectations in Country Areas increased by 0.2% points to 5.6% in November and are again slightly higher than in the Capital Cities at 5.4%, up 0.1% points from a month ago.
Roy Morgan CEO Michele Levine says weekly Inflation Expectations were at 5.3% in mid-December, down from 5.4% in November and 5.6% in mid-November as average retail petrol prices dropped by 15 cents from over $2 per litre in mid-November to $1.86 last week:
“ANZ-Roy Morgan Inflation Expectations in Australia have dropped in recent weeks and are now at 5.3% in mid-December, down from 5.4% for the month of November. Inflation Expectations reached a weekly high of 5.7% in mid-October 2023 and have trended lower over the last two months as petrol prices have fallen.
“Average retail petrol prices peaked at $2.11 per litre in October, and soon after that Inflation Expectations reached a weekly high of 5.7%. Since then, petrol prices have declined – down by around 25 cents per litre, and Inflation Expectations have also eased.
“Nevertheless, petrol prices have now been above $1.80 per litre for 23 straight weeks since mid-July – almost double the previous record of 13 weeks in a row achieved earlier this year. During this period petrol prices have averaged $1.98 per litre although have dropped more than 10 cents per litre below this level in the last two weeks.
“The reduction in inflationary pressures in the economy was recognised by the RBA at its final meeting of the year in early December. The RBA interest rate setting board decided to leave interest rates unchanged at a 12-year high of 4.35% and doesn’t meet again until early February.
“The meeting in February will come after the monthly and quarterly inflation figures for December 2023 are released at the end of January. Until then, the weekly ANZ-Roy Morgan Inflation Expectations indicator will show how Australians view inflation in the economy and what their believe will happen to prices in the Australian economy during 2024 and 2025.”
See below for a comprehensive list of RBA interest rate changes during the time-period charted above.
The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source which has interviewed an average of around 5,000 Australians aged 14+ per month over the last decade from November 2013 – November 2023 and includes interviews with 5,982 Australians aged 14+ in November 2023.
For comments and information about Roy Morgan’s Inflation Expectations data, please contact:
Roy Morgan Enquiries
Office: +61 (3) 9224 5309
askroymorgan@roymorgan.com
The questions used to calculate the Monthly Roy Morgan Inflation Expectations Index.
1) Prices: “During the next 2 years, do you think that prices in general will go up, or go down, or stay where they are now?”
2a) If stay where they are now: “Do you mean that prices will go up at the same rate as now or that prices in general will not go up during the next 2 years?
2b) If go up or go down: “By about what per cent per year do you expect prices to (go up/ go down) on average during the next 2 years?”
3) “Would that be (x%) per year, or is that the total for prices over the next 2 years?”
The Roy Morgan Inflation Expectations Index is a forward-looking indicator unlike the Consumer Price Index (CPI) and is based on continuous (weekly) measurement, and monthly reporting. The Roy Morgan Inflation Expectations Index is current and relevant.
| Monthly Roy Morgan Inflation Expectations Index (2010 – 2023) | |||||||||||||
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Yearly Average |
| 2010 | n/a | n/a | n/a | 5.9 | 5.8 | 5.5 | 5.6 | 5.4 | 5.5 | 5.8 | 5.6 | 5.8 | 5.7 |
| 2011 | 6.6 | 6.4 | 6.4 | 6.2 | 6.1 | 6.2 | 6.1 | 5.8 | 5.7 | 5.8 | 5.5 | 5.5 | 6.0 |
| 2012 | 5.4 | 5.5 | 5.9 | 5.9 | 6.0 | 6.2 | 5.9 | 5.9 | 5.8 | 5.7 | 5.6 | 5.4 | 5.8 |
| 2013 | 5.2 | 5.1 | 5.3 | 4.9 | 5.2 | 4.9 | 5.3 | 5.0 | 4.8 | 4.9 | 4.8 | 5.0 | 5.0 |
| 2014 | 5.1 | 5.2 | 5.2 | 5.1 | 5.1 | 5.3 | 5.0 | 4.8 | 5.0 | 4.8 | 4.9 | 4.4 | 5.0 |
| 2015 | 4.4 | 4.3 | 4.5 | 4.5 | 4.2 | 4.4 | 4.4 | 4.5 | 4.5 | 4.2 | 4.4 | 4.5 | 4.5 |
| 2016 | 4.3 | 4.2 | 4.2 | 4.2 | 4.0 | 4.0 | 4.1 | 3.9 | 4.1 | 4.1 | 3.9 | 4.2 | 4.1 |
| 2017 | 4.5 | 4.4 | 4.4 | 4.4 | 4.3 | 4.2 | 4.3 | 4.5 | 4.4 | 4.5 | 4.5 | 4.5 | 4.4 |
| 2018 | 4.5 | 4.4 | 4.3 | 4.5 | 4.3 | 4.5 | 4.3 | 4.3 | 4.3 | 4.5 | 4.3 | 4.2 | 4.4 |
| 2019 | 4.2 | 4.0 | 4.0 | 3.7 | 4.1 | 3.8 | 4.1 | 3.9 | 4.0 | 4.1 | 3.9 | 4.0 | 4.0 |
| 2020 | 3.9 | 4.0 | 4.0 | 3.6 | 3.3 | 3.2 | 3.4 | 3.2 | 3.3 | 3.5 | 3.4 | 3.6 | 3.5 |
| 2021 | 3.6 | 3.7 | 3.8 | 3.7 | 3.7 | 4.0 | 4.1 | 4.3 | 4.5 | 4.8 | 4.9 | 4.8 | 4.2 |
| 2022 | 4.9 | 5.1 | 5.8 | 5.5 | 5.3 | 5.7 | 5.9 | 5.6 | 5.4 | 5.6 | 6.5 | 6.0 | 5.6 |
| 2023 | 5.3 | 5.3 | 5.6 | 5.3 | 5.2 | 5.6 | 5.6 | 5.4 | 5.2 | 5.3 | 5.4 | 5.4 | |
| Monthly Average | 4.8 | 4.8 | 4.9 | 4.8 | 4.8 | 4.8 | 4.9 | 4.8 | 4.8 | 4.8 | 4.8 | 4.8 | 4.8 |
| Overall: Roy Morgan Inflation Expectations Average: 4.8 | |||||||||||||
The Roy Morgan Consumer Confidence Report – Including Inflation Expectations
To learn more about the trends for Inflation Expectations as well as Consumer Confidence for different segments and demographics throughout the Australian community, purchase the Roy Morgan Consumer Confidence Monthly Report.
RBA interest rates changes during the time-period measured: 2010-2023.
RBA – Interest rate increasing cycle (2010):
2010
April 2010: +0.25% to 4.25%; May 2010: +0.25% to 4.75%, November 2010: +0.25% to 5%.
RBA – Interest rate cutting cycle (2011-2013, 2015-2016 & 2019-2020):
2011 – 2013
November 2011: -0.25% to 4.5%; December 2011: -0.25% to 4.25%; May 2012: -0.5% to 3.75%;
June 2012: -0.25% to 3.5%; October 2012: -0.25% to 3.25%; December 2012: -0.25% to 3%;
May 2013: -0.25% to 2.75%; August 2013: -0.25% to 2.5%.
2014
There were no RBA interest rate changes during 2014.
2015 – 2016
February 2015: -0.25% to 2.25%; May 2015: -0.25% to 2%; May 2016: -0.25% to 1.75%;
August 2016: -0.25% to 1.5%.
2017 – 2018
There were no RBA interest rate changes during 2017-18.
2019 – 2020
June 2019: -0.25% to 1.25%; July 2019: -0.25% to 1%; October 2019: -0.25% to 0.75%;
March 4, 2020: -0.25% to 0.5%, March 20, 2020: -0.25% to 0.25% & November 6, 2020: -0.15% to 0.1%.
RBA – Interest rate increasing cycle (2022-23):
2022
May 2022: +0.25% to 0.35%, June 2022: +0.5% to 0.85%; July 2022: +0.5% to 1.35%;
August 2022: +0.5% to 1.85%; September 2022: +0.5% to 2.35%; October 2022: +0.25% to 2.6%; November 2022: +0.25% to 2.85% and December 2022: +0.25% to 3.1%.
2023
February 2023: +0.25% to 3.35%; March 2023: +0.25% to 3.6%; May 2023: +0.25% to 3.85%;
June 2023: +0.25% to 4.10%; November 2023: +0.25% to 4.35%.
Margin of Error
The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.
| Sample Size | Percentage Estimate |
| 40% – 60% | 25% or 75% | 10% or 90% | 5% or 95% | |
| 1,000 | ±3.0 | ±2.7 | ±1.9 | ±1.3 |
| 5,000 | ±1.4 | ±1.2 | ±0.8 | ±0.6 |
| 7,500 | ±1.1 | ±1.0 | ±0.7 | ±0.5 |
| 10,000 | ±1.0 | ±0.9 | ±0.6 | ±0.4 |
| 20,000 | ±0.7 | ±0.6 | ±0.4 | ±0.3 |
| 50,000 | ±0.4 | ±0.4 | ±0.3 | ±0.2 |
