Australia Consumer Mood Edges Up in Dec

The Westpac-Melbourne Institute Consumer Sentiment index in Australia rose 2.7% to 82.1 in December 2023 from 79.9 in November, remaining in pessimistic levels and marking its second worst year on record as a surge in the cost of living and sharply higher interest rates weighed heavily.

The index held below the neutral 100 mark since March 2022, the longest streak since the early 1990s recession.

Meanwhile, the Reserve Bank of Australia’s decision to keep interest rates unchanged in December lifted sentiment.

Matthew Hassan, senior economist at Westpac said: “The RBA's decision to leave rates on hold at its final meeting of the year has eased concerns that further hikes are imminent.

However, this is small comfort for Australian consumers that have seen incomes come under extraordinary pressure from a surge in the cost of living, sharply higher interest rates and a rising tax take.”