Consumer expectations for inflation have fallen to the lowest point in just over 10 years as Australians become more concerned about the deteriorating economic outlook, a survey shows.

A Melbourne Institute survey of consumer inflationary expectations found the expected median inflation rate was 2.3 per cent in February, down from 2.7 per cent the previous month and the lowest reading since December 1998.

The February result was less than half the 5.9 per cent recorded in July last year, which was the highest monthly reading since the survey began in 1993.

Melbourne Institute research fellow Sam Tsiaplias said the spate of poor domestic and global economic news had dampened expectations of price rises.

"Negative economic news and the prospect of higher unemployment have been on consumers' minds and have come to the forefront in the last few months," Dr Tsiaplias said.

"That tends to have a dissipative effect on prices."

The survey of 1200 people aged 18 years and older was conducted between February 2 and 8, after the release of the December quarter consumer price index.

Inflation, as measured by the CPI, fell 0.3 per cent in the December quarter for an annual rate of 3.7 per cent, figures from the Australian Bureau of Statistics showed.

The proportion of respondents who expect prices to increase fell to 52.7 per cent in February, down from 55.6 per cent the previous month.

This compared with just 81.7 per cent in July last year.

"Historically, we've seen about 70 to 75 per cent of people expect price to go up," Dr Tsiaplias said.

"The last three months we've seen that figure closer to 50 per cent, so it's a significant drop in the number of people that expect prices to rise."

The proportion of respondents who expected prices to either stay the same or go down rose to 34.1 per cent in February, from 30.8 the previous month.

Dr Tsiaplias said the positive effect of handouts to pensioners and low- to middle-income families in December, as part of the federal government's first fiscal stimulus package, appeared to have dissipated.

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