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Inflation expectations down significantly in mid-April

Source: Roy Morgan Single Source: Interviews an average of 4,300 Australians per month aged 14+ (Apr. 2010 – Apr. 2020).
In mid-April there was a jolt to Australian Inflation Expectations with a steep fall in the weekly index on April 18/19, 2020 to a record low of only 3.1%, down from 3.8% the week before and significantly below the 2020 weekly average of 4%.

The weekly fall was caused by fewer Australians expecting prices to increase over the next two years down to 69.4% (down 1.4% on a week ago) and more expecting prices to either decrease – up 1% to 10.8% or ‘Stay the same’ – up 0.4% to 19.8%.

Roy Morgan CEO Michele Levine says the steep drop in Inflation Expectations in mid-April comes as the impact of the COVID-19 pandemic begins to hit key pricing metrics in the economy:

“The COVID-19 pandemic has provided the biggest economic shock to Australians for generations, since at least World War II eighty years ago. This week’s steep fall in Inflation Expectations to a record low of only 3.1% comes as petrol prices around Australia have plummeted to multi-decade lows.

“Petrol prices, and the oil price more generally, are often seen as the barometer of the global economy and when these decline this signals weakness in the broader economy. The drop in petrol prices in Australia to under $1 per litre is the lowest price many Australians have seen at the bowser since the early 2000s around two decades ago.

“It is no surprise a much lower petrol price is occurring and Inflation Expectations are also dropping in tandem. Looking more broadly at the wider oil market one would expect further declines in petrol prices at the pump in the weeks and months to come.

“The restrictions imposed on movement as part of the global efforts to halt the spread of COVID-19 have seen an estimated decline in the daily demand for oil of 20-30 million barrels per day – a drop of 20-30%. The drop in demand has not yet been matched by a drop in the supply of oil. Over-night oil contract prices for May cratered and fell up to 300% as prices for oil went sharply negative due to a lack of storage space for the oil. Producers are now willingly paying others to take their oil off their hands.

“The lower petrol prices, together with the Federal Government’s $130 billion ‘JobKeeper’ wage subsidy, should provide a further boost to the ANZ-Roy Morgan Consumer Confidence Rating as a progressive re-opening of the Australian economy begins as soon as next month. The weekly measure has already increased by nearly 30% to 84.2 since hitting a low of 65.3 on March 28/29, 2020.”

Inflation Expectations Index long-term trend – Expected Annual Inflation in next 2 years

Source: Roy Morgan Single Source: Interviews an average of 4,300 Australians per month aged 14+ (Apr. 2010 – Apr. 2020).

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Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in 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


25% or 75%

10% or 90%

5% or 95%