Australia’s lockdowns hit consumer confidence
Australia’s consumer confidence fell this month. However, the decline was not as sharp as some had predicted, considering Australia’s two largest cities’ stay-at-home orders due to a surge in the COVID-19 Delta variant.
Westpac Banking Corp. on Wednesday reported the sentiment index dropped 4.4% to 104.1 points in August, touching the lowest point in a year. However, optimists still outnumbered pessimists with a 100-point difference.
The Reserve Bank of Australia sees household consumption declining by roughly 15% this quarter. The economy is also expected to contract due to prolonged lockdowns.
Despite this, the RBA is optimistic that the economy will maintain its solid recovery. The central bank also sticks with its plans to taper bond purchases for now.
Westpac Senior economist Matthew Hassan said the remarkable resilience of consumer sentiment suggests the economy is well-positioned to rebound once virus restrictions are lifted.