Australia's Consumer Index Drops to New Low in Over 2 Years As Families Worry About Money
By Reissa Su | May 23, 2014 11:29 AM EST
Australian Prime Minister Tony Abbott gestures as he gives a speech on a business event at the Shanghai International Expo Centre in Shanghai, April 11, 2014. REUTERS/Stringer
According to reports, the Westpac Melbourne Institute Index of Consumer Sentiment declined 6.8 per cent in May to its lowest level since August 2011. Consumer index has remained under 100 points for the second consecutive month. This means majority of Australians feel less optimistic about the economy.
Following the days before the budget's release, Australia's consumer index has dropped in anticipation of the budget cuts. Westpac chief economist Bill Evans said the sharp decline in index has left an "unfavourable" reaction towards the federal budget.
Those who responded to Westpac's survey were especially concerned about how the budget would affect the household finances. Confidence in the economy in 2015 has also dropped by 14.2 per cent, the lowest level in over two years.
Tom Kennedy, an economist for JP Morgan, was not surprised by the low consumer confidence. He said only a few were spared from the federal budget as the government announced cuts in spending for health, education and welfare. Mr Kennedy said families are more likely to control their spending in response to the Abbott government budget.
Prime Minister Tony Abbott has dismissed the results of two surveys that said majority of Australians felt they were "worse off" after the budget cuts were announced.
The Australian economy will continue to struggle at a slow growth pace to remove pressure from the rising unemployment rate which is currently on its 10-year high. In the latest regional report, the International Monetary Fund (IMF) expects the country's economy to grow below the trend.
In its latest regional report released in April, the IMF has downgraded its growth forecast for Australia for two years from 2.6 per cento in 2014 and 2.7 per cent in 2015 since October 2013.
The Washington-based institution had previously expected Australia's economy to grow between 2.8 and 2.9 per cent. The IMF said Australia's economy is expected to grow below the trend since investments in the mining boom have reached its peak and continues to decline.
To contact the editor, e-mail:
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Australia's Low Birth Rate May Be Due to Low Confidence in Economy
- Fears Of Infection Spread Prompt Some US Hospitals To Refuse Ebola Patients
- Readers Slam a Book Showing That US Wealth And Power Rests on Slave Labour
- LG G Watch R To Be Available Globally Starting With Europe, North America And Asia Through Retail Sites And Play Store
- Young Teen Fighter Says ISIS Uses Drugs On Suicide Bombers To Get Them Perform The Act
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS