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Date Published : Thursday, June 12, 2008
Australian consumer confidence has reached in lowest level since 1992 this month, a new survey has found.
The study from Westpac Banking and the Melbourne Institute recorded a decline in the consumer sentiment index to 84.7 points this month, down 5.6 per cent from the score for May, news service Bloomberg reports.
It is the fifth straight month that the index was below 100 points - meaning more people feel pessimistic about the economic outlook than positive.
The site adds that many Australians are cutting their spending in response to the rising cost of food and fuel prices, as well as increased loan repayments.
Westpac's chief economist Bill Evans told the site: "Petrol prices are likely to have been the main culprit for this sharp fall."
Michael Workman, a senior economist with the Commonwealth Bank of Australia added: "The more restrictive financial conditions of the past six months, combined with higher petrol prices, are slowing consumer-related spending."
All this could be bad news for the economy, which grew at its slowest rate in a first quarter - 0.6 per cent - for "almost two years", it noted.
However, demand is still fuelling inflation, prompting reserve bank governor Glenn Stevens to say he was prepared to raise interest rates again in order to cool the market.
Bloomberg had previously reported figures from the Australian Bureau of Statistics that show interest rates are already at a 12-year high of 7.25 per cent following increases in February and March.
At the start of the month, Governor Stevens said he expects inflation to decline in the future, as long as demand "evolves as expected".
In tighter economic conditions, those looking for financial products could benefit from shopping around for the best deal.
Compare loan deals.
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