ANZ-Roy Morgan Inflation Expectations fell to 4.2% in late February – well down from 5.0% for the month of January
The weekly ANZ-Roy Morgan Inflation Expectations were 4.2% for the week of February 17-23, 2025, down a significant 0.8% points from the month of January and the lowest since August 2021.
However, a look at monthly Inflation Expectations for January 2025 shows the measure at 5.0% for the month – an increase of 0.2% points from the month of December, and just above the average for last year of 4.9%.
Looking back over the last year, weekly Inflation Expectations have moved in a band of 4.2% - 5.3% since the start of 2024 and averaged 4.9%. 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 – Dec. 2024).
Petrol prices were unchanged at $1.83 per litre in January; at their equal highest since August 2024
The month of January saw average retail petrol prices unchanged at $1.83 per litre. During January, average retail petrol prices started the month at $1.89 per litre and dropped throughout the month to end the month at $1.82 per litre. However, after January ended, average retail petrol prices have subsequently increased marginally to around $1.86 per litre in late February although weekly inflation expectations have fallen in February compared to their average for the month of January.
Looking longer-term, average retail petrol prices have now been above $1.70 per litre for a record 127 straight weeks since mid-September 2022 – well over two years. Average retail petrol prices hit a low of $1.73 per litre in late September 2024, again in mid-October, and for a third time in late November 2024.
Looking back average retail petrol prices have now averaged $1.88 per litre since early March 2024, but this has dropped to an average of $1.80 per litre since mid-September 2024 over the last five months.
The persistently high petrol prices are clearly a key factor putting upward pressure on Inflation Expectations, which have continued at a six-month high in January after increasing in November and December, but the overall trend is for lowering inflation. The latest official ABS Quarterly annual CPI estimate at 2.4% for the December quarter 2024, was a decrease of 0.4% points from the 2.8% recorded for the September quarter 2024.
The official inflation estimate of 2.4% for the 12 months to December quarter 2024 is now within the Reserve Bank’s inflation target of 2-3% over the course of the economic cycle and has led to the first cut in official interest rates by the RBA in mid-February for over four years since the middle of the COVID-19 pandemic.
The next ABS Monthly CPI estimate for January 2025 is due to be released on Wednesday this week.
Australian average retail petrol prices (cents per litre) weekly: 2021 – 2025
Source: Australian Institute of Petroleum (AIP) weekly reports: https://www.aip.com.au/pricing/weekly-prices-reports.
Inflation Expectations are highest in Western Australia and Queensland – well above 5%
A look at Monthly Inflation Expectations on a State-based level shows Western Australia has the highest Inflation Expectations in January at 5.4%, up 0.4% points from a month ago – the equal largest monthly increase of any State.
In second place is Queensland with Inflation Expectations of 5.3%, up 0.1% points from a month ago. Inflation Expectations also increased in Victoria, up 0.3% points to 5%, in New South Wales, up 0.3% points to 4.9% and in South Australia, up 0.4% points to 4.9%.
In contrast, Inflation Expectations dropped significantly in Tasmania, down a substantial 0.9% points to 4.8% and now the lowest of any State.
Inflation Expectations in Country Areas were increased by 0.3% points to 5.2% in January and increased by 0.2% points to 5.0% in Capital Cities.
Roy Morgan CEO Michele Levine says weekly Inflation Expectations were at 4.2% in late February, down a sharp 0.8% points from the monthly estimate of 5.0% for January, indicating inflationary pressures in the economy are significantly lower than where they were a year ago:
“ANZ-Roy Morgan Inflation Expectations in Australia fell in February and are now at 4.2%, down 0.8% points from the month of January (5.0%). However, Inflation Expectations for the month of January had increased by 0.2% points from December, a second straight monthly increase.
“The increase in Inflation Expectations towards the end of last year, and earlier this year, tracks with the average retail petrol price which increased late last year after hitting lows of $1.73 in each of late September 2024, mid-October, and again in the last week of November 2024.
“Importantly, since reaching that level, average retail petrol prices steadily increased in the next few weeks and months and have been consistently above $1.80 per litre since early December, putting upward pressure on Inflation Expectations and broader inflation. Over the longer-term petrol prices have been above $1.70 per litre for 127 straight weeks since mid-September 2022.
“Looking forward, the ABS is set to release the January 2025 monthly CPI estimates later this week. The estimates will be keenly watched to see if the estimates continue at their low rate. The ABS estimated quarterly annual inflation was only 2.4% in the year to December 2024 – below the middle of the Reserve Bank’s preferred target range.
“The sharp reduction in inflationary pressures in the broader economy during 2024 during which official annual inflation fell from 4.1% in 2023 to 2.4% in 2024 – a fall of 1.7% points – led to the Reserve Bank cutting official interest rates by 0.25% to 4.1% at their meeting in mid-February 2025.
“The latest results from the weekly ANZ-Roy Morgan Inflation Expectations show a sharp decline in expectations but have been somewhat mixed over the last five to six weeks. This volatility suggests that upward pressures on inflation persist although the Reserve Bank’s decision to cut interest rates in February appears to have had a significant impact on the Inflation Expectations of Australians.
“The volatility in energy prices, and Inflation Expectations, shows how sensitive Australians are to changes in the prices of essential everyday goods – like petrol.”
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 5,300 Australians aged 14+ per month over the last decade from February 2015 – January 2025 and includes interviews with 6,086 Australians aged 14+ in January 2025.
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 – 2025) | |||||||||||||
| 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 | 4.9 | 5.2 | 4.9 | 4.9 | 5.1 | 5.0 | 4.7 | 4.7 | 4.7 | 4.8 | 4.9 |
| 2025 | 5.0 | 5.0 | |||||||||||
| Monthly Average | 4.8 | 4.8 | 4.9 | 4.8 | 4.8 | 4.8 | 4.9 | 4.8 | 4.7 | 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.
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 |
