2024.01.1606:19:00UTC+00Australia Consumer Sentiment Weakens On Higher Cost Of Living, Interest Rates

Australia consumer confidence weakened further at the start of the year as the rising cost of living and high interest rates continued to weigh on incomes, survey results from Westpac showed on Tuesday.

The Westpac-Melbourne Institute Consumer Sentiment Index dropped to 81.0 in January from 82.1 in December.

The sub-indexes of the consumer sentiment suggested that a moderate boost from the less threatening interest rate outlook was more than offset by a further deterioration in family finances and rising concerns about the medium to longer term prospects of the economy.

Family finances came under renewed pressure, the survey showed. The "finances compared to a year ago" sub-index dropped 7.6 percent to 63.0.

The measure reflecting the view on the economic outlook in next 5 years slid 6.1 percent to 89.1.

Meanwhile, both the indexes for the assessment on the economic outlook and finances in next 12 months gained moderately, up 3.9 percent to 81.8 and 2.9 percent to 93 respectively.

The gauge for the mood for big purchases was largely unchanged at weak levels, dipping slightly to 78.0.

The 'time to buy a dwelling' sub-index eased 3.1 percent to 72.0, continuing to hold in the very weak 72-76 range.

The Westpac-Melbourne Institute Unemployment Expectations Index edged up 1.4 percent in January to 130.7.

The Westpac-Melbourne Institute Index of House Price Expectations rose slightly, up 0.5 percent to 158.1.

The Reserve Bank of Australia board next meets on February 5 and 6.

The RBA is set to leave rates unchanged in February, and the central bank is unlikely to raise rates further from here, Westpac senior economist Matthew Hassan said.