Australia: 2021 budget sends consumer sentiment to over two-year high in October
The Westpac-Melbourne Institute consumer sentiment index jumped from 93.8 in September to 105.0 in October, marking the highest reading since July 2018. The submission of draft budget to parliament in early October was chiefly behind the marked improvement in consumer sentiment, as households considered it would improve their finances significantly. Therefore, sentiment moved above the 100-mark, indicating that there were more optimists than pessimists among Australian consumers.
October’s improvement was broad-based, with views on the economy in the year ahead soaring and the outlook on the economy in the coming five years turning considerably less pessimistic. Moreover, households’ attitudes regarding their finances in the past 12 months and the year ahead also improved markedly. Consequently, willingness to buy large ticket items strengthened noticeably; this is also in part due to better expectations over the labor market. Meanwhile, consumers’ willingness to buy a dwelling strengthened in October, while their expectations for house prices rose sharply.
FocusEconomics panelists are still assessing the latest developments.