Australian consumer sentiment has fallen drastically over the last month, according to the latest Westpac consumer sentiment index.
The index looks at five categories: assessments of family finances compared to a year ago, expectations for family finances and the economy over the next year, expectations for the economy over the next five years, and whether now is a good time to buy a major household item.
From March to April, the index found that consumer sentiment fell from 91.6 to 80.1, or 12.5%, which marks the largest fall since the COVID pandemic.
The plummet has been attributed to skyrocketing fuel prices and growing interest rates.
Average fuel pump prices reached $2.40/litre in the first week of April, an increase of 37 cents from the March survey and 77 cents compared to the same time in February.
Fears of job loss were also at the highest point in five and a half years.
“Australian consumers are being hit by another ‘cost of living’ shock. The spike in fuel prices following the U.S.–Israel war on Iran and a further 25bp interest rate increase are again putting finances under intense pressure,” said Matthew Hassan, Head of Australian Macro-Forecasting.
“At 80, the Index is back near historical lows, albeit above the extremes seen at the onset of the pandemic and during the recessions of the early 1990s and 1980s.”
