Australian consumer sentiment improves

Australia's consumer sentiment index fell to a record low in November. However, it has already risen in December. It’s driven by the fact that consumers anticipate the end of a difficult cycle of rising interest rates.

According to the Westpac-Melbourne Institute data, the consumer sentiment index fell by 6.9% in November, but it has grown by 3.0% in December, indicating a partial recovery. The index currently stands at 80.3. Such a figure proves that the pessimists outnumber the optimists so far.

According to Westpac chief economist Bill Evans, news regarding interest rates has recently become less negative. It may be an indication that the tightening cycle is coming to an end.  

The Reserve Bank of Australia (RBA) raised its interest rate by 0.25% in early December. Thus, at the moment it’s 3.1%, which is the highest figure in the last 10 years. It’s worth noting that back in May, the rate was 0.1%.

The Westpac house prices outlook index also rose sharply by 27.6% in December, even though most people thought it was a bad time to buy a home.