Inflation expectations among Australian consumers declined in September for a second consecutive month, a private survey reported Thursday.
The Melbourne Institute’s 12-month gauge of inflation expectations fell to 3.8% in September, following a reading of 4.2% the previous month.
The Melbourne Institute’s monthly report is closely watched by the financial markets because inflation expectations have a tendency of affecting actual price growth.
Consumer prices in Australia weakened to an annualized 1.9% in the second quarter, government data showed earlier this summer. Annual inflation reached 2.1% between January and March, the strongest reading since mid-2014.
Second-quarter growth was broadly in line with the consensus, as consumer and government spending supported the economy. Gross domestic product (GDP) grew at an annualized 1.8% in Q2.
Last week, the Reserve Bank of Australia (RBA) voted to keep monetary policy on hold amid growing signs of a housing slowdown. The RBA has held its overnight cash rate at a record low of 1.5% since August 2016 when it lowered it by 25 basis points.
Record low wages and weak underlying inflation have also kept policymakers on the sidelines for the past year.