FX.co ★ Australia Consumer Confidence Signals Strong Resurgence Amid Rate Hike Pause: Westpac

Australia's consumer confidence strengthened notably in April, bolstered by the decision of the Reserve Bank to pause rate hikes after a sequence of ten consecutive increases, survey results from Westpac showed on Tuesday.

The Westpac Melbourne Institute Index of Consumer Sentiment surged 9.4 percent to 85.8 in April from 78.5 in March.

The survey of 1200 respondents was conducted over four days from April 3 to 6.

The resurgence in April is a direct result of the Reserve Bank of Australia board's decision to pause the rate hike, Westpac said.

The level of confidence is now at its highest since June 2022, though 10.4 percent below April 2022, the month before the central bank raised the cash rate.

"Despite this lift in April, we still characterize Consumer Sentiment as weak and consistent with Westpac's view that consumer spending through 2023 and at least the first half of 2024 will be lack-lustre," Westpac chief economist Bill Evans said.

The survey revealed that mortgage-holders' confidence improved sharply by 12.2 percent although it remained 14.5 percent below the level it reached prior to the tightening cycle.

Among sub-components, consumers' opinion regarding the economy's outlook for the next 12 months improved in April, with the sub-index rising to 95.5 from 85.3 in March, and that for the general economic conditions rose slightly from 95.3 to 96.0.

The confidence in the outlook for house prices increased markedly in April, as the respective index came in at 130.3 versus 11.7 a month ago.