Australian consumer sentiment slumped in June, indicating the government’s budget and the central bank’s interest-rate cut last month provided only a temporary confidence boost.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 6.9 percent in June from May to 95.3, which is 1 percent below its pre-budget level and the weakest reading since the start of 2015, Westpac Banking Corp. said in a statement.
“It now appears that last month’s surge of optimism was a brief relief rally following the Reserve Bank of Australia’s May rate cut and a budget that was less damaging than many feared,” Westpac Senior Economist Matthew Hassan said.
The consumer sentiment index rose 6.4 percent in May after the central bank lowered the cash rate by 25 basis points to a record low 2 percent and the government offered tax cuts and instant write-offs for small firms in its annual budget. The government said the measures would build a “stronger and more prosperous Australia.”