SYDNEY, Feb. 14 (Xinhua) -- Major banks on Tuesday posted downward results of Australian consumer confidence, after the Reserve Bank of Australia (RBA) lifted the cash rate to 3.35 percent in record ninth consecutive hike last week.
The Westpac Bank reported that Australian consumer sentiment has fallen back into "deep pessimism", as its index plunged 6.9 percent from 84.3 in January to 78.5 in February.
"At 78.5, the latest Index read is a touch above the 78 read in November but below the low point of the GFC (79.0) and only slightly higher than when the COVID pandemic first hit in April 2020 (75.6)," said the bank's senior economist Matthew Hassan.
"Prior to that, we need to go back to the deep recession in the early 1990s to find weaker Index readings," Hassan noted.
According to Westpac's report, the index components showed a "particularly big deterioration in views" on family finances.
The "family finances vs a year ago" sub-index dropped 8 percent in February to just 62.1 -- marking the weakest reading since the depths of the early-1990s recession, while the index read amongst consumers with a mortgage was just 55.4, down 14.4 percent since January.
"These are amongst the bleakest responses on this question in the history of the survey, which goes back to the mid-1970s," said the economist, adding that consumers are poised to cut back sharply on spending.
Meanwhile, the Australia and New Zealand Banking Group (ANZ) also detected the plunging confidence, given that its newly-released ANZ-Roy Morgan Consumer Confidence index dropped 5.5 points to 78.1 this week.
Now 19 percent of Australians believes that their families are "better off" financially than this time last year, which is the lowest figure for this indicator for nearly three years since April 2020.
Only 7 percent of Australians expect "good times" for the Australian economy over the next 12 months, compared to over two-fifths anticipating "bad times".
"Consumer confidence fell after the RBA raised interest rates by 25 basis points. This was the sharpest weekly drop in confidence since the June 2022 RBA meeting, which delivered the first 50 basis points cash rate hike of the current interest rate cycle," said Adelaide Timbrell, senior economist from ANZ.
"The average confidence among people paying off their mortgages fell sharper than other housing cohorts last week, by 10 percentage points to its lowest since early April 2020," she added. ■
