In March Australians expected inflation of 3.8% annually over the next two years, up 0.1% points on February, and the highest since March 2020 (4.0%).
Inflation Expectations are now 0.9% points below their long-term average of 4.7% but have increased by 0.6% points since reaching a record low of only 3.2% in August 2020.
Women’s Inflation Expectations are now at 4.3%, up by 0.5% points since the low-point in August 2020, and remain far higher than men’s at 3.4% which are up by 0.8% points during the same period.
The Inflation Expectations of women are significantly higher than men across the age spectrum with the largest gap of 1.5% points for people aged 50-64: Women 4.8% cf. men 3.3%.
The lowest Inflation Expectations among women are for those aged 18-24 at 3.9%, but this is still higher than any age cohort of men. From there women’s Inflation Expectations increase with age and peak for people aged 50-64 at 4.8% before dropping to 4.2% for those aged 65+.
Young men aged 18-24 also have the lowest Inflation Expectations for men at only 3.0%, but those slightly older aged 25-34 have the highest at 3.6%. There is little difference in Inflation Expectations for men aged 35-49 (3.4%), 50-64 (3.3%) or 65+ (3.3%) – but they are all far lower than women in the same age brackets.
Inflation Expectations by Gender & Age: March 2021
Source: Roy Morgan Single Source: March 2021, n=5,997. Base: Australians aged 14+.
Inflation Expectations are again highest in Tasmania and are now lowest in South Australia
On a State-based level Inflation Expectations are highest in Tasmania at 4.6%, an increase of 1.2% points since the low-point of August 2020. Tasmanians go to the polls in three weeks for a State Election called by Premier Peter Gutwein nearly a year earlier than was expected.
Inflation Expectations in Queensland are also significantly higher than the national average at 4.3% (up 0.9% points since August 2020) and are 4% (up 1.3% points) in Western Australia.
There has been less movement in other States since the low-point in August 2020 with Inflation Expectations now at 3.8% (up 0.6% points) in Victoria and 3.6% (up 0.3% points) in New South Wales.
South Australia has the lowest Inflation Expectations at 3.3%, up by only 0.1% points since August 2020.
As well as increasing Inflation Expectations the ANZ-Roy Morgan Consumer Confidence Rating has continued to recover and was at 110.9 for the month of March 2021, an increase of 21.8pts (+24.5%) since August 2020.
Consumer Confidence for March was the highest monthly figure for the rating since the month of November 2019 (111.2) more than a year ago.
Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years
Source: Roy Morgan Single Source: Interviewing an average of 4,500 Australians aged 14+ per month (April 2010 – Mar. 2021).
See below for a comprehensive list of RBA interest rate changes during the time-period charted above.
Roy Morgan CEO Michele Levine says Inflation Expectations have increased again in March and are now up in five of the last seven months and at their highest for a year since March 2020: