Business News Asia
The Westpac-Melbourne Institute has announced that the Australian Consumer Sentiment Index fell in February. The main reason for the falling sentiment is rising inflation. Households are having to shoulder a heavier debt burden as prices rise. Rising borrowing costs are also contributing to this. Energy prices, especially oil prices, are weighing heavily on households.
The consumer sentiment index fell 1.3% in February to 100.8.
Westpac Chief Economist Bill Evans said: “The most likely explanations for these elevated pressures on finances relate to: Omicron-related disruptions to activity and earnings at the start of the year; the rising cost of living; and the prospect of rising interest rates.”
The survey data, however, indicates that consumers have a positive view of the economy, but a negative view of personal finances.
Bloomberg News reported earlier this year that Reserve Bank of Australia (RBA) Governor Philip Low held out the prospect of a rate hike this year. Economists expect the RBA to raise interest rates for the first time around June.