Australian inflation expectations rise in mid-July
Sydney (22 July)
Australian consumers’ two-year forward inflation expectations rose from 5.7% to 5.8% over the week to 19 July, largely because of recent Iran war-related fuel price spikes, data from the ANZ-Roy Morgan Consumer Confidence report indicate.
Consumer inflation expectations last hit 5.8% over the week to 21 June, ANZ-Roy Morgan survey data released on 21 July show. Expectations fell to a recent low of 5.4% over the week to 5 July – immediately before the US-Iran Peace Deal collapsed on 8 July – but have increased each week since then.
Australia’s inflation expectations have increased alongside fuel prices in recent weeks. Diesel prices in Australia’s five largest cities averaged A$1.93/litre on 15 July, up from A$1.86/litre a week earlier, because of global diesel price spikes, ACCC data released on 17 July show.
Diesel prices in many Australian cities have increased further since 15 July. Retailers in New South Wales (NSW) lifted their average diesel prices by A$0.14/litre, from A$2.03/litre to A$2.17/litre, between 16 July and 21 July, data from price monitor Fuel Check NSW show.
Western Australian retailers similarly hiked diesel prices by A$0.12/litre to A$1.90/litre over 13-19 July, according to price monitor Fuel Watch WA.
Fuel prices are unlikely to fall anytime soon. Brent crude futures traded at $91.66/barrel on 21 July, up from $71.57/barrel on 1 July, because of violence and shipping disruptions around the Strait of Hormuz. Brent crude futures prices last traded above $91/barrel on 10 June, one day before US and Iranian authorities announced plans to extend a now-scuttled ceasefire for two months.
Australia had 46 days’ worth of petrol reserves, 39 days’ worth of diesel reserves, and 34 days’ worth of jet fuel reserves on 18 July, Prime Minister Anthony Albanese said at the time.
“Australians can continue to have confidence in the work that the Government has done to ensure that we have fuel security … We remain at level two [of the National Fuel Strategy (NFS)],” Albanese added.
By Avinash Govind