Australia Consumer Confidence Hits 20-Month High

The Westpac-Melbourne Institute Consumer Sentiment index in Australia jumped 6.2% to 86 in February 2024 from 81 in January, the highest reading in 20 months amid easing inflation and optimism that the Reserve Bank of Australia has concluded its tightening campaign.

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

Matthew Hassan, a senior economist at Westpac said: “While sentiment is still firmly pessimistic there finally looks to be some light at the end of the tunnel for Australian consumers.

Moderating inflation and shifting expectations for interest rates appear to be the main factors behind the lift." Australia’s inflation rate slowed to 4.1% in the fourth quarter of last year, while the RBA held rates steady at 4.35% at its February meeting.