Australia’s consumer sentiment saw a notable recovery in March, with the Westpac Consumer Sentiment Index rising by 4.0% month-over-month to 95.9, the highest reading in three years and nearing the neutral 100 mark. This improvement reflects growing confidence in the economy, spurred by easing inflation and the Reserve Bank of Australia’s (RBA) interest rate cut in February.
Westpac attributed the boost in sentiment to these factors, along with a generally positive outlook on job security, signaling that a “soft landing” for the economy may be in sight. However, concerns over global uncertainties continue to dampen the overall economic outlook.
As for the RBA’s next move, Westpac anticipates the central bank will hold the cash rate steady at its upcoming meeting on March 31-April 1. Despite the February rate cut, the RBA has signaled that further reductions are unlikely unless inflation slows more significantly.
Looking further ahead, Westpac expects a more dovish stance from the RBA later this year, forecasting additional rate cuts starting in May as inflationary pressures continue to ease.
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