Australia: Consumer sentiment perks up in January, reaches multi-year high
January 17, 2018
The Westpac-Melbourne Institute Index of Consumer Sentiment increased from 103.3 in December to 105.1 in January. As a result, the index remained above the crucial 100 mark which separates optimism from pessimism among consumers, and marked the highest figure since late 2013.
January’s increase was broad-based. Consumers grew more positive regarding their finances over the next 12 months, and their future economic conditions. Consumers also became more willing to purchase major household items. Confidence was likely boosted by expectations of a slower rise in interest rates than was previously anticipated, and a robust labor market and economic growth. However, the degree to which higher confidence translates into higher spending will likely be limited by consumers’ elevated indebtedness and low savings rates.
Australia Private Consumption Forecast
FocusEconomics Consensus Forecast panelists see private consumption growing 2.4% in 2018 and 2.4% again in 2019.
Author: Oliver Reynolds, Economist