Australia consumer sentiment hits 3-yr high in March after RBA rate cut- Westpac

Published 11/03/2025, 01:14
© Reuters.

Investing.com-- Australian consumer sentiment rose to a three-year high in early-March, a private survey showed on Tuesday, as consumers were enthused by falling inflation and the Reserve Bank of Australia’s first interest rate cut in over four years. 

The Westpac-Melbourne Institute consumer sentiment index jumped 4% to 95.9 in March, picking up pace after a 0.1% rise in the prior month. 

The boost in sentiment comes chiefly after the RBA cut rates by 25 basis points in February- the central bank’s first rate cut since the COVID-19 pandemic. The RBA flagged some progress in bringing down inflation, but warned that future easing will still depend on further declines in inflation. 

Still, the index remained below 100- at 95.9 points, indicating that pessimists outnumbered optimists. While sentiment did improve in March, it came after years of sustained weakness.

Fears of more trade tariffs under U.S. President Donald Trump, an escalating trade war, slowing global economic growth and geopolitical uncertainty between Russia and Ukraine all worked to keep sentiment glum. 

The Australian economy was also seen cooling in recent years, although growth picked up more than expected in the fourth quarter of 2024 on improving public and private spending. 

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