SYDNEY: With COVID-19 cases at their lowest point since the pandemic began, Australian consumer confidence recorded a seven-year-high, helping to boost the country out of its first recession in decades.
The Melbourne Institute and Westpac Bank Consumer Sentiment Index for Australia increased 2.5 percent to 107.7 points in November, following an 11.9-percent jump in October, putting the index at its highest point since November 2013.
The result released on Wednesday follows progress in Australia’s containing of the virus, with the two most COVID-19 affected states, New South Wales and Victoria, not recording a single locally acquired cases for the past five days and 12 days respectively. “We’re bounding back from the terrible lows that we saw as we moved through the worst part of the COVID-19 recession,” Prime Minister Scott Morrison said.
The signs were encouraging for local retailers ahead of the peak-shopping Christmas period, with spending expected to resemble normal levels as Aussies shell out on gifts and other festivities. “I would imagine that up until two months ago people were expecting a very unusual Christmas,” Westpac Bank Chief economist Bill Evans said. “But what we can say is that despite all the uncertainties and volatility that we’ve seen this year, spending intentions indicate that we’re heading towards a normal Christmas.” Evans attributed the relatively rosy outlook to the recent lifting of lockdown in Victoria, with the index sitting 35 percent above where it was in August when the lockdown began.
He added that at the time the survey was conducted the Reserve Bank of Australia had slashed the official interest rate to just 0.1 percent, with Governor Philip Lowe saying that he did not expect to raise the rate for at least three years. “That’s meant that banks have responded by pushing the fixed mortgage rates down to less than the psychological barrier of 2 percent,” he said. –Agencies
