The forecasts follow data from the Australian Bureau of Statistics which detail the quarterly inflation rate and where the increases have occurred.

The huge spike in holiday costs caused by what has been referred to as “revenge travel”, otherwise known as the long-needed break you had in December and January after two years of restrictions and uncertainty, has been a major factor in Australia’s inflationary economy, but even that was fading.

According to the inflation data released by the Australian Bureau of Statistics, prices for holiday, travel and accommodation skyrocketed almost 30 per cent in December and 18 per cent in January as demand outstripped supply.

It’s still high, but falling significantly. The annual change for March was a 14 per cent increase and April – with all its public holidays – was expected to be a bonanza for the sector. The ANZAC Day break was expected to generate $150 million and the month was forecast to bring in $2.7 billion, according to the Queensland Tourism Industry Council.

However, airline fares were easing.

Economist Warren Hogan said the data showed the pandemic shock in goods pricing was fading and leaving behind a domestic inflation in the services sector.

He said domestic price pressures remained very real in housing, energy and labour markets. New dwelling prices were falling fast, down to an annual rate of 11 per cent in March, almost half the increase in July last year as supply chain issues resolved and demand softened.

However, that is the full story with housing. House sales are coming back strongly. Auction clearance rates were now at a level which usually indicated prices were rising by about 10 per cent, according to ANZ.

The bank has scrapped its forecast of a 10 per cent decline in 2023 to neutral. It follows a similar forecast last week from Westpac.

“Even with 1 per cent productivity growth, the current wage trajectory between 4 per cent and 5 per cent means we have more work to do to slow the economy and reduce excess demand for labour. (There’s) Nothing stopping the RBA from another 25bp rate hike next week,” he said.

The ANZ Bank disagrees. It cited the data which showed a quarterly inflation of 1.4 per cent and 7 per cent for the year was in line with RBA expectations.

It said the RBA would maintain its pause next month, but may increase rates in the near future.

Market Economics economist Stephen Koukoulas said inflation was plummeting and likely to fall almost as fast as it rose in 2021-2022.

“Inflation is in freefall. It’s fallen more than 2 percentage points in three months,” he said.

“When the RBA sits to digest this at the monthly board meeting next week they are going to be hugely comforted by the fact that we have got this clear, downward momentum in the rate of inflation.”

He said the RBA would “sit tight”.

Rents were still climbing and increased 5.3 per cent in the year to March, but the pace has slowed because of the impact of government support payments.

Food was another area where prices were still rising. Dairy products rose 15 per cent in the year to March because of the increase in farmgate prices while packaging and processing for chips, chocolate and edible oils lifted food costs by 11 per cent.