Westpac-Melbourne Institute Consumer Sentiment Index Falls to Six-Month Low in April as Tariff Turmoil Drags Outlook
Consumer sentiment in Australia fell to a six-month low in April, dropping 6% to 90.1, as US tariffs created uncertainty. The index showed a significant decline among those surveyed after the tariff announcement, indicating a risk of further declines in sentiment. All components weakened, with family finances at their lowest since July 2024. Westpac anticipates a 25 basis point cut in the Reserve Bank of Australia's key rate in May.
Consumer sentiment declined to six-month low in April in signs of "deepening unease" in the wake of US tariffs, according to a survey by Westpac and Melbourne Institute published Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index fell 6% to 90.1 in April from 95.9 in March.
Those surveyed before the tariff announcement reported an index read of 93.9, only a slight decline from March. Those surveyed after the announcement reported an index read of 86.6, down nearly 10%, according to the report.
"With the situation still deteriorating, there is a clear risk of more significant sentiment declines in the months ahead," said Matthew Hassan, head of Australian macro-forecasting at Westpac.
All component indexes weakened in April, with the "family finances vs a year ago" indicator down to its lowest level since July 2024.
Westpac expects the Reserve Bank of Australia to cut the key rate by 25 basis points in May.
