The Reserve Bank of Australia (RBA) has held fire on an interest rate rise for the fourth straight month, meaning the official cash rate will remain at 4.75 percent.
Economists were unanimous prior to the RBA's announcement there would not be a follow-up rate increase in the cash rate after the shock rise of 25 basis points in November last year.
However, most of the economists predict the first hike would occur either in the third or fourth quarter of the year.
By the end of 2011, the cash rate was expected to be at 5.25 per cent, the median of the survey showed.
The RBA raised the cash rate to 4.75 per cent in November 2010, in a pre-emptive move against inflation amid the threat of rising commodity prices and a tightening labour market.
Damian Smith, RateCity CEO, said that many Australians remained in a state of mortgage stress.
"Many households will be relieved about the decision to leave the cash rate unchanged. A growing number of households are falling behind on their mortgage repayments, which is very concerning. We estimate that 40,000 households across Australia are at least a month behind on their repayments," he said.
In announcing the decision the RBA Glenn Stevens Governor said that inflation was consistent with the medium-term objective of monetary policy, having declined significantly from 2008.
"Production losses due to weather are temporarily raising prices for some agricultural produce, which will boost the March quarter CPI, but these prices should fall back later in the year," he said.
"Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the 2 - 3 per cent target."
National Australia Bank (NAB) senior economist Spiros Papadopoulos said global economic strength would keep demand for Australian commodities high, which may prompt the central bank to tighten policy soon.
"That will obviously drive a lot of investment growth in the mining and resources sector," he said.
"Domestically, that will help maintain and even tighten the labour market even further."
He says this may push the unemployment rate down to 4.5 per cent by the end of the year, well below the five per cent level which many economists see as the point at which wage inflation will start to accelerate.
For the time being, however, continued reluctance from householders to spend and global economic uncertainty could see the RBA forced to hold the cash rate steady in the near term, Mr Papadopoulos said.
"Obviously, if there were any major unexpected global disruption in the second half of the year, the RBA would have to take that into account.
"But at this stage, all we can do is assume that there will be some semblance of normality towards the end of the year ... and if that is the case, then the RBA will look at what's happening domestically and just conduct policy in its normal fashion."
JP Morgan economist Ben Jarman said the earthquake crisis in Japan and elevated oil prices have forced JP Morgan to move its forecasts for the first cash rate hike of the year from May to August.
"(Those disruptions) mean that they (the RBA) will need a few more months to just get some more data to check that those drags aren't going to be too significant," Mr Jarman said.
"Judging from RBA commentary, that they're getting more and more confident about what the growth drivers in the economy will be and that's definitely going to be investment, given the prospects for our commodity exports over quite a long horizon."
Meanwhile, Nomura chief economist Stephen Roberts expected the central bank to take a more pre-emptive approach to monetary policy over the year.
He expects a 25 basis point increase in May and another hike in August - taking the cash rate to 5.25 per cent by the end of the year and staying that way "well into 2012".
"There's not much (point) in waiting until they get the evidence that the economy is picking up, because by then, if you're moving concurrently, you'd probably have to do more rate hikes than otherwise would be the case," Mr Roberts said.
"Otherwise, they'll chase themselves and have to put three or four interest rates out there because they'd be going concurrently with the data.
"To my mind, that's nonsense - it doesn't make any sense. Why end up having to do more rate hikes than you need to because you're not prepared to do it a little bit early."