Australia’s consumer sentiment improved modestly in April as lower fuel prices helped ease part of the energy shock that hit households earlier this year, though confidence remained deeply pessimistic overall. Westpac Consumer Sentiment Index rose 3.5% mom to 83, recovering slightly from extreme lows as the government’s temporary halving of the fuel excise tax.
Westpac said the improvement mainly reflected easing fuel stress after last month’s sharp spike in oil prices. However, the positive impact was largely offset by the RBA’s 25bp rate hike earlier this month, its third consecutive increase, alongside ongoing cost-of-living pressures.
Forward-looking measures remained particularly weak. The “economy, next 12 months” sub-index fell -1.5% to 74.2, while the “economy, next 5 years” gauge slipped -2.2% to 89.3, marking the weakest combined reading since November 2022.
According to Westpac, RBA is expected to pause tightening at its June 15–16 meeting after raising interest rate at the previous three meetings, allowing policymakers time to assess the impact of both higher interest rates and the energy shock. Still, Westpac warned inflation risks remain high as rising energy costs continue passing through into broader prices, suggesting the pause may only be temporary before additional tightening resumes later this year.
