Inflation Expectations in late March are at 5.1% – up slightly from the month of February (5.0%)
The latest weekly Inflation Expectations are at 5.1% for the week of March 18-24, 2024. This figure is in line with the average over the last 15 weeks of surveying since early December – also of 5.1% – and up slightly from the month of February.
A look at the monthly Inflation Expectations for February 2024 showed the measure at 5.0% for the month, a decrease of 0.1% points on January 2024 (5.1%). The figure of 5.0% for the month of February 2024 was the lowest monthly inflation figure for over two years since January 2022 (4.9%).
Looking back over the last few months, since mid-December 2023 weekly Inflation Expectations have moved in a narrow band of 4.8% - 5.3%. In addition, the latest information on weekly Inflation Expectations is available to view each week in the Roy Morgan Weekly Update video on YouTube.
Monthly Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years
Source: Roy Morgan Single Source: Interviewing an average of 4,900 Australians aged 14+ per month (April 2010 – Feb. 2024).
Recent increases in petrol prices have put renewed upward pressure on Inflation Expectations
After February ended, Inflation Expectations dipped in early March, but have now recovered and have moved higher in late March. A likely driver of this week’s increase in Inflation Expectations is the recent strength in the retail price of petrol which are now over $2 per litre.
Looking longer-term, the average retail petrol price has now been above $1.80 per litre for a record 37 straight weeks since mid-July 2023 – over eight months. Average retail petrol prices dipped to an $1.85 per litre in January but have since increased, up 11 cents per litre to $1.96 per litre in February and have averaged over $2 per litre so far in March.
The persistently high petrol prices are clearly a key factor putting upward pressure on Inflation Expectations despite the official ABS Monthly annual CPI figure dropping to a two-year low of 3.4% in December 2023 and January 2024, down a large 0.9% points from 4.3% (November 2023) and down a massive 2.2% points since September 2023 (5.6%).
The sharp drop in the official inflation readings over the last few months, with monthly inflation dropping a massive 2.2% points since September 2023, has raised hopes the RBA will not undertake any further interest rate increases. The RBA left interest rates unchanged last week at 4.35%.
The next ABS Monthly annual CPI figure for February 2024 is due out later this week (March 27).
Australian average retail petrol prices (cents per litre) weekly: 2021 – 2024
Source: Australian Institute of Petroleum (AIP) weekly reports: https://www.aip.com.au/pricing/weekly-prices-reports.
Inflation Expectations decreased significantly in South Australia and Tasmania
A look at Monthly Inflation Expectations on a State-based level shows decreases in the States of South Australia, Queensland, Tasmania and Western Australia, unchanged in Victoria, and increasing in NSW.
Inflation Expectations in South Australia in February were down 0.5% points to only 4.6% and clearly the lowest of any of the States, and a large drop in Tasmania, down 0.8% points to 4.8%.
There were also smaller declines in Western Australia, down 0.1% points to 5.0%, and down 0.2% points to 5.6% in Queensland – but still easily the highest of any State for a third straight month.
In contrast, Inflation Expectations in Victoria were unchanged at 4.8%, and were up by 0.1% points to 5.0% in Australia’s largest State of New South Wales, to be in line with the national average.
Inflation Expectations in Capital Cities dropped 0.3% points to 4.8% in February and were responsible for all of the monthly decline. In contrast, Inflation Expectations for Country Areas were up 0.1% points to 5.3%.
Roy Morgan CEO Michele Levine says weekly Inflation Expectations were at 5.1% in late March, up slightly from the monthly figure of 5.0% for February as average retail petrol prices increased markedly over the last few weeks:
“ANZ-Roy Morgan Inflation Expectations in Australia have increased into late March and are now at 5.1%, up 0.1% points from the month of February (5.0%). Inflation Expectations had been dropping in recent months, but the declines have now halted after renewed pressure from high petrol prices.
“Average retail petrol prices hit a cycle low of $1.82 per litre in mid-January, but have steadily increased ever since, up 14 cents per litre to an average of $1.96 per litre in February and have now averaged over $2 per litre so far in March – an increase of almost 20 cents per litre.
“Over the longer-term petrol prices have been above $1.80 per litre for 37 straight weeks since mid-July – almost triple the previous record of 13 weeks in a row a year ago. In addition, since early February average petrol prices have now been above $1.90 per litre for eight weeks in a row.
“Looking forward, the ABS is set to release the February 2024 monthly CPI figures later this week. The ABS figures will be keenly watched to see if the declines seen in recent months continue (dropping from 5.6% in September 2023 to 3.4% in December 2023/January 2024) or if the renewed upward pressures, such as from higher petrol prices, contribute to an uptick in the official figures.
“The latest results from the weekly ANZ-Roy Morgan Inflation Expectations suggest the renewed upward pressures on inflation are having an impact on consumer perceptions on the path of inflation over the next two years.
“The RBA has now left interest rates unchanged at both of its two meetings so far this year in February and March 2024. These meetings were held soon after the release of lower-than expected inflation figures for December 2023 and January 2024. The RBA doesn’t meet again until early May – after the ABS releases the latest inflation figures for March 2024.”
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 5,100 Australians aged 14+ per month over the last decade from March 2014 – February 2024 and includes interviews with 5,998 Australians aged 14+ in February 2024.
For comments and information about Roy Morgan’s Inflation Expectations data, please contact:
Roy Morgan Enquiries
Office: +61 (3) 9224 5309
askroymorgan@roymorgan.com
About Roy Morgan
Roy Morgan is Australia’s largest independent Australian research company, with offices in each state, as well as in the U.S. and U.K. A full-service research organisation, Roy Morgan has over 80 years’ experience collecting objective, independent information on consumers.
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 – 2024) | |||||||||||||
| 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 | 5.3 | 5.4 |
| 2024 | 5.1 | 5.0 | 5.1 | ||||||||||
| 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 |
