Australia’s Westpac Consumer Sentiment Index saw a modest increase of 2.8% mom in August, rising from 82.7 to 85.0. Westpac attributed this uptick to a “small sigh of relief” from consumers after RBA decided to keep interest rates unchanged, coupled with the positive effects of tax cuts and other fiscal measures.
However, despite the rise, the index remains historically weak, hovering within the 78–86 range that has persisted for over two years. Westpac’s analysis highlighted ongoing concerns among consumers about the cost of living and potential future rate hikes, which continue to “weigh heavily” on sentiment.
Looking ahead to RBA’s next meeting on September 23-24, Westpac noted that data flow leading up to the meeting is unlikely to provide significant new insights into inflation trends. With RBA having already ruled out near-term rate cuts, it is expected that the central bank will maintain its current interest rate at the upcoming meeting.
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