Australia’s Westpac Consumer Sentiment rose 1.7% mom to 83.6 in June. However, the index remains deeply pessimistic, well below neutral level of 100. Although assessments of personal finances and buyer sentiment have become less negative, concerns about inflation, interest rates, and economic growth continue to weigh heavily on consumers.
The sub-index tracking the ‘economic outlook for the next 12 months’ fell -5.7% mom to 78.5, marking its lowest level since last October. In contrast, the ‘economic outlook for the next 5 years’ sub-index saw a slight improvement, rising 2.1% mom to 94.1.
Regarding RBA monetary policy, Westpac noted that the upcoming Q2 CPI data, due on July 31, will be crucial. Westpac expects the update to confirm that weak demand is still exerting disinflationary pressure. This should provide RBA with sufficient confidence that upside risks are not materializing, reducing the likelihood of a rate hike.
