The recent reduction in the Reserve Bank of Australia (RBA) did not improve consumer confidence, as consumer confidence fell to its lowest level in two years.
The sentiment fell 4.1% to 96.5 in July, the lowest reading since August 2017, according to the Westpac-Melbourne Institute survey. Sub-index tracking forecasts also experienced the largest decline, down 12.3%.
"The drop in sentiment this month is troubling as it runs up against what should have been a favorable backdrop. The main factor continues to raise more and more concern about the prospects for the Australian economy and family finances, "said Matthew Hassan, senior economist at Westpac.
The RBA lowered rates to a record 1% to boost economic growth, and the government adopted its tax package easing the burden on households. However, consumers remained pessimistic.
The consumer survey, based on 1,200 interviews, revealed that rate reductions are equated with a declining economy.
Hassan said the weak response to the rate cuts and tax relief was because both were already anticipated.
The investigation also revealed that market stabilization in capital cities failed to impress consumers.
"Worsening economic forecasts outweighed any short-term support for lower interest rates and tax relief. The sub-index tracking consumer expectations for finance over the next 12 months also fell sharply by 8%, returning to pessimistic net territory for the first time since 2017, "said Hassan.
Top suburbs:
Tuart Hill
,
Melton
,
Murdoch
,
Eagle Valley
,
South Brisbane
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