ANZ-Roy Morgan Inflation Expectations dropped to 4.5% in mid-May – down from 4.8% for the month of April
The weekly ANZ-Roy Morgan Inflation Expectations were 4.5% for the week of May 12-18, 2025, down 0.3% points from the month of April, following two straight weekly declines in early May.
A look at monthly Inflation Expectations for April 2025 shows the measure at 4.8% for the month – a second consecutive monthly increase of 0.1% points from the nearly four-year low in February of 4.6%.
Looking back over the last year, weekly Inflation Expectations have moved in a band of 4.2% - 5.2% since the start of May 2024 and averaged 4.8%. 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 5,000 Australians aged 14+ per month (April 2010 – April 2025).
Average retail petrol prices dropped back to $1.79 per litre in April; their lowest level so far this year
During April, average retail petrol prices were very stable. Average retail petrol prices started the month at $1.79 per litre and stayed between $1.78-$1.80 throughout the rest of the month for a decline of only 4 cents per litre compared to March.
After April ended, average retail petrol prices have remained low, and even fallen further in early May, and have now spent eight straight weeks below $1.80 per litre – the longest stretch at such a low level since September 2022.
Although average retail petrol prices remained low in April and have dropped even further in May, weekly inflation expectations increased marginally in April, as President Trump’s ‘Liberation Day’ tariffs played havoc with share-markets worldwide and prompted fears of higher inflation. The recovery in global stock-markets in recent weeks has led to a reduction in weekly inflation expectations so far in May.
Looking longer-term, average retail petrol prices have now been at, or above, $1.70 per litre for a record 139 straight weeks since mid-September 2022 – well over two years. In mid-May average retail petrol prices hit a low of $1.70 per litre – the lowest since mid-September 2022.
Looking back average retail petrol prices have now averaged $1.87 per litre since mid-February 2024, but this has dropped to an average of $1.80 per litre since early August 2024 over the last nine months.
The reduction in petrol prices in recent weeks is clearly reducing the inflationary pressures in the economy heading into today’s meeting of the Reserve Bank to consider the level of Australian interest rates.
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.
The latest official ABS Monthly annual CPI estimate at 2.4% for the year to March 2025 is directly within the Reserve Bank’s preferred target range of 2-3% over the course of the economic cycle. Official estimates of inflation have now been within the preferred target range for seven months since August 2024.
The drop in official estimates of inflation led to the first cut in official interest rates for over four years since the middle of the COVID-19 pandemic by the RBA in mid-February by +0.25% to 4.1% and there are widespread expectations the RBA will make an additional cut to interest rates today.
The next ABS Monthly CPI estimate for April 2025 is due to be released on Wednesday next week.
Inflation Expectations were highest in Queensland and Tasmania at 5% or more in April
A look at Monthly Inflation Expectations on a State-based level for April shows mixed results with increases in four States, and slight falls in two other States.
The largest increase was in Tasmania, up 1.1% points to 5.1% and now just above Queensland at 5.0%, despite a small decrease of 0.2% points from March. Queensland has now had the highest Inflation Expectations of all five mainland States for six out of the last seven months since October 2024.
There are then three States with Inflation Expectations in line with the national average at 4.8% including New South Wales (up 0.1% points since March), Western Australia (up 0.5% points) and South Australia (up 0.5% points). The State with the lowest Inflation Expectations is Victoria on 4.7% (down 0.1% points).
Inflation Expectations in Country Areas were unchanged at 5.1% in April but were up 0.2% to 4.7% in Capital Cities.
Roy Morgan CEO Michele Levine says weekly Inflation Expectations were at 4.5% in mid-May, down 0.3% points from the monthly estimate of 4.8% for April, as falling petrol prices as well as worries concerning US President Trump’s ‘Liberation Day’ tariffs receded significantly:
“ANZ-Roy Morgan Inflation Expectations in Australia have dropped in May and are now at 4.5%, down 0.3% points from the month of April (4.8%). Before falling in recent weeks, Inflation Expectations had increased marginally by 0.1% points in both March and April.
“The drop in Inflation Expectations in recent weeks comes after worries concerning inflation spiked in April as US President Donald Trump announced on so-called ‘Liberation Day’ in early April that the United States would be imposing significant tariffs on all major US trading partners.
“Since then, President Trump has suspended many of these tariffs, including a 90 days suspension of most of the tariff increases levied on China – America’s largest trading partner.
“The rollback of the initial tariffs for many countries has reassured markets that Trump is really after long-term trade deals rather than pursuing a policy of high tariffs indefinitely. Trump’s desire to get ‘good deals’ with trading partners is set to see tariffs lower than feared going forward.
“Although these global political ‘shenanigans’ spiked the Inflation Expectations of Australians, during April, other factors are lowering Inflation Expectations. Average retail petrol prices hit $1.70 per litre this week – the lowest for well over two-and-a-half years since September 2022.
“In addition, the official ABS inflation estimates have continued within the Reserve Bank’s preferred target range of 2-3% over the course of the economic cycle – at 2.4% for the year to March 2025. Inflation Expectations have now been within the target range for eight straight months since August 2024 averaging 2.4% during this period.
“Looking forward, the Reserve Bank is expected to lower interest rates later today, likely by +0.25% to 3.85%, and next meets in early July. By that time there will be two new ABS Monthly Inflation estimates released for April (May 28) and for May (June 25) to the board to consider.
“The sharp reduction in inflationary pressures in the broader economy over the last year 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% in mid-February 2025 and is set to lead to an additional interest rate cut later today.
“The latest results from the weekly ANZ-Roy Morgan Inflation Expectations show the increase in expectations during April, and especially related to US President Donald Trump’s ‘Liberation Day’ tariffs, was not sustained and the indicator has decreased significantly during May as global share-market volatility receded and petrol prices fell to their lowest levels in almost three years.
“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 May 2015 – April 2025 and includes interviews with 5,129 Australians aged 14+ in April 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.
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 |
