ANZ-Roy Morgan Inflation Expectations in late May have dropped to 4.9% after spiking in April as petrol prices increased
The latest weekly ANZ-Roy Morgan Inflation Expectations are at 4.9% for the week of May 20-26, 2024. This represents a slight decline from the average so far this year of 5.0%, and a pullback from the month of April (5.2%).
A look at monthly Inflation Expectations for April 2024 shows the measure at 5.2% for the month – the highest monthly figure so far this year and up 0.3% points from March 2024 (4.9%). This is the largest monthly increase in Inflation Expectations since June 2023 when the measure increased 0.4% points to 5.6%.
Looking back over the last few months, since the start of the year, weekly Inflation Expectations have moved in a narrow band of 4.8% - 5.3% and averaged 5.0%. 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 – Apr. 2024).
Petrol prices spiked to their highest since September 2023 during April at an average of $2.04 per litre
The month of April saw average retail petrol prices spike to a high of $2.12 per litre in the final week of the month – the highest they’ve been since July 2022 nearly two years ago – and less than 1 cent from the all-time record high of $2.13 per litre in March 2022 – just after Russia invaded Ukraine.
For the month of April as a whole average retail petrol prices were $2.04 per litre – the highest for seven months since September 2023 (average price of $2.05 per litre). After April ended, both average retail petrol prices, and Inflation Expectations, fell during the first few weeks of May. Retail petrol prices have fallen during all four weeks of May so far to under $1.90 per litre for the first time since January.
However, despite falling in May, average retail petrol prices have now been above $1.80 per litre for a record 46 straight weeks since mid-July 2023 – over ten months. Average retail petrol prices hit a high of $2.12 per litre in the final week of April and have now dropped back to $1.89 per litre this week. Nevertheless, average retail petrol prices have averaged $2 per litre since late February.
The persistently high petrol prices are clearly a key factor putting upward pressure on Inflation Expectations despite the official ABS Quarterly annual CPI figure dropping to a more than two-year low of 3.6% in the March quarter 2024, down 0.5% points from 4.1% (December quarter 2023) and down a massive 4.2% points since the high reached in December quarter 2022 (7.8%).
The sharp drop in the official inflation from a year ago has raised hopes the RBA will not undertake any further interest rate increases in the months ahead. However, the recent spike in petrol prices shows that there is still a risk inflation can re-accelerate and increase once more in the months ahead.
The next ABS Monthly annual CPI figure for April 2024 is due out later this week (May 29).
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 increased significantly in NSW, Victoria and Western Australia
A look at Monthly Inflation Expectations on a State-based level shows increases in five States in April led by the two largest States of New South Wales and Victoria. There were also increases in Western Australia and Tasmania. In contrast, Inflation Expectations were unchanged in Queensland and South Australia.
The biggest increases for Inflation Expectations were in Victoria, up 0.4% points to 4.9%, and Western Australia, up 0.3% points to 4.9%. These two States, as well as South Australia for which Inflation Expectations were unchanged at 4.9%, now have the lowest Inflation Expectations of any States.
There were also increases in Inflation Expectations for Tasmania, up 0.2% points to 5.6%, and for New South Wales, up 0.3% points to 5.2% and in line with the national average for the third straight month.
Queensland, which has had the highest Inflation Expectations of any State all year, still has the highest Inflation Expectations at 5.8% for the fifth straight month, although unchanged on a month earlier.
Inflation Expectations in Capital Cities increased 0.3% points to 5.0% in April but are still clearly lower than in Country Areas, up 0.2% points to 5.5% - and the highest so far this year.
Roy Morgan CEO Michele Levine says weekly Inflation Expectations were at 4.9% in late May, down from the monthly figure of 5.2% for April as average retail petrol prices decreased from $2.12 per litre in late April by over 20 cents per litre to $1.89 this week:
“ANZ-Roy Morgan Inflation Expectations in Australia have decreased over the last few weeks and are now at 4.9%, down 0.3% points from the month of April (5.2%). Inflation Expectations had increased rapidly in April to the highest level so far this year as petrol prices hit their highest level for nearly two years since July 2022.
“Average retail petrol prices hit a cycle high of $2.12 per litre in late April – the highest average retail petrol prices since reaching the same level nearly two years ago in July 2022. Since late April, average retail petrol prices have dropped every subsequent week and are now at $1.89 per litre this week – down over 20 cents per litre only four weeks later.
“Over the longer-term petrol prices have been above $1.80 per litre for 46 straight weeks since mid-July 2023 – more than triple the previous record of 13 weeks in a row in early 2023. In addition, since late February average weekly petrol prices have averaged a very high $2 per litre.
“Looking forward, the ABS is set to release the April 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 3.5% in March 2024).
“The sharp rise in petrol prices in April, and the effect these increases clearly had on Inflation Expectations for the month – driven to clearly its highest level so far this year – suggest there may be an uptick in inflation during April despite the longer-term downward trends.
“The latest results from the weekly ANZ-Roy Morgan Inflation Expectations suggest the upward pressures on inflation were relatively short-lived during April and have since subsided as energy costs have fallen in May. The volatility in energy prices, and Inflation Expectations, does show 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 5,100 Australians aged 14+ per month over the last decade from May 2014 – April 2024 and includes interviews with 7,593 Australians aged 14+ in April 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 | 4.9 | 5.2 | 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 |
