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Australians’ Inflation Expectations down slightly to 5.1% in April before Hockey delivered his first ‘Horror’ Budget this week

This face-to-face Morgan Poll on Australian inflation expectations was conducted during the month of April with an Australia-wide cross-section of 4,178 Australians aged 14+.

Australian inflation expectations over the next two years fell slightly to 5.1% per year in April. This is up 0.2% from a year ago in April 2013.

Analysis by State shows a fall in inflation expectations in four States led by the two smallest States of South Australia (4.6%, down 0.2%) and Tasmania (4.5%, down 0.2%). Tasmania remains the State with the lowest inflation expectations for the second straight month. There were also smaller falls in Victoria (4.9%, down 0.1%) and Queensland (5.3%, down 0.1%). Inflation expectations were unchanged in Western Australia at 5.2% while New South Wales was the only State in which inflation expectations rose – up 0.1% to 5.4%.

Analysis by Federal voting intention shows that L-NP supporters (4.6%) have clearly the lowest inflation expectations below Greens supporters (5.0%) and well below ALP supporters (5.4%). Supporters of Independents and Other parties (5.7%) once again have the highest inflation expectations in Australia.

The ANZ-Roy Morgan Weekly Consumer Confidence Rating has fallen significantly over the past month since early April as the Abbott Government has warned of a tough Federal Budget to be delivered and is now at 103.7 (down 9.0pts since the weekend of April 12/13, 2014).

Gary Morgan, Executive Chairman, Roy Morgan says:

“April’s Roy Morgan Inflation Expectations Index fell slightly to 5.1% (down 0.1%) driven by falls in four States – Victoria (4.9%, down 0.1%), Queensland (5.3%, down 0.1%), South Australia (4.6%, down 0.2%) and Tasmania (4.5%, down 0.2%).

“During the same period, ANZ-Roy Morgan Consumer Confidence fell to 103.7 (down a substantial 9.0pts since April 12/13, 2014) as the Abbott Government, and in particular Treasurer Joe Hockey, warned of a tough Federal Budget to be delivered in mid-May.

“Hockey was true to his pre-Budget rhetoric this week announcing a raft of new taxes impacting on many Australians, and also announcing several cuts to spending – including taking an estimated $80 billion out of Federal spending in the areas of Health and Education over the next decade.

“A special Roy Morgan SMS Consumer & Business Pulse Poll conducted yesterday showed huge majorities of both Australian consumers (88%) and Australian businesses (74%) believe this year’s Federal Budget will not provide them with any benefit.”

This new research-based economic indicator is important for two reasons – it complements existing measures and is available earlier. 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.

This face-to-face Morgan Poll on Australian inflation expectations was conducted during the month of April with an Australia-wide cross-section of 4,178 Australians aged 14+.


For further information:

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Gary Morgan:

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Michele Levine:

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Australian Inflation Expectations - April 2014


Monthly Roy Morgan Inflation Expectations Index (2010 – 2014)

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

Overall Roy Morgan Inflation Expectations Average: 5.6








The questions that are 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) If respondent says more than 5%.

“Would that be (x%) per year, or is that the total for prices over the next 2 years?”