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Budget fails to ease consumers? inflationary expectations

Staff Reporter 1 minute read

The Federal Government’s budget has offered little hope to consumers to combat inflation, according to the Melbourne Institute – who expects inflation to deteriorate further.

The proportion of the Institute’s survey respondents that expected annual inflation to fall within the RBA target of two-three per cent decreased to 9.5 per cent in May.

Dr Sam Tsiaplias, research fellow with the Institute, said this was the lowest proportion of consumers expecting inflation to fall within the RBA’s target since June 2000.

The median expected value of inflation also increased to a high 5.2 per cent, from 4.3 per cent in April.

“May’s median expected inflation figure is the highest since October 2005,” Dr Tsiaplias said, “and suggests that the Federal Budget has done little to ease inflationary expectations among consumers.”

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Published: 23-05-08

Budget fails to ease consumers? inflationary expectations
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