Higher petrol prices, the rising cost of home building and an increase in rents are expected to be among key drivers in a solid rise in the consumer price index for the March quarter.
However, it will still leave the annual rate of inflation way short of what the Reserve Bank wants to see before it even starts considering lifting the cash rate from its record low 0.1 per cent.
Economists expect Wednesday’s CPI for the first three months of the year to have risen by 0.9 per cent, lifting the annual rate to 1.4 per cent.
The annual rate was just 0.9 per cent at the end of 2020 as a result of the first recession in nearly 30 years.
Underlying inflation, which smooths out wild price swings in the CPI and is a key guide to interest rate decisions, is expected to remain relatively subdued, rising around 0.6 per cent in the quarter to 1.4 per cent annually from 1.2 per cent.
The Reserve Bank minutes of its April board meeting released last week said annual CPI was expected to rise temporarily to around 3 per cent in the middle of the year as a result of the reversal of some pandemic-related price reductions.
However, underlying inflation was likely to remain below 2 per cent over both 2021 and 2022.
The minutes also reiterated the central bank has no intention of lifting the cash rate until inflation is sustainably within its 2 to 3 per cent target band, an event unlikely to happen until 2024.
Wednesday will also see the Australian Bureau of Statistics’ first payrolls jobs report since the JobKeeper wage subsidy finished in March.
National Australia Bank economist Taylor Nugent said although the data covers the first two weeks following the end of JobKeeper, it is unclear how much of a signal it will provide given their tendency to be heavily revised.
Treasury has estimated up to 150,000 jobs could have been lost as a result of the end of the program.
Meanwhile, Australian shares are set for a steady opening on Monday after Wall Street enjoyed a broad rally on Friday after a choppy week of trading.