Australian consumer confidence drops to recessionary levels

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SYDNEY – Australian consumer confidence fell 7.6% last week to its lowest level since the economy experienced a damaging recession in the early 1990s, according to an ANZ Bank and Roy survey Morgan.

ANZ Australian Chief Financial Officer David Plank said the news of a 50 basis point increase in official Reserve Bank of Australia interest rates last week shocked many and severely affected trust.

Confidence is at its lowest level since early April 2020, during the early stages of the Covid-19 pandemic. Outside of the pandemic, consumer confidence has not been so low since January 1991, amid the recession of the early 1990s, Plank added.

Reflecting the disastrous state of affairs, the percentage of respondents who expect good times for the economy over the next five years has dropped to 10%, the lowest level on record, he said.

So far this year, household spending has been resilient despite the softness of consumer confidence. The RBA, for example, will look closely to see if this divergence can continue, Plank added.

Weekly inflation expectations fell 0.1 percentage points to 5.6%, while its four-week moving average remained unchanged at 5.5%, the survey showed.

Sentiment on current financial conditions fell 1.0%, while future financial conditions fell 10.1%. Current economic conditions fell 7.2% after a 9.4% loss the previous week. Future economic conditions fell 4.6%, according to the survey.

Consumers also saw a 14.4% drop in their willingness to buy a major household item.

The Australian ANZ-Roy Morgan Consumer Confidence Weekly Assessment is based on 1,454 online and telephone interviews conducted during the week through Sunday.

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