16.12.202500:21:20UTC+00Australia Consumer Sentiment Falls Sharply

In December 2025, Australia's Westpac-Melbourne Institute Consumer Sentiment Index experienced a significant drop, declining by 9.0% from the previous month to a level of 94.5. This marked a return to pessimism after the index had briefly surpassed the 100-point optimism threshold in November for the first time since February 2022. The decrease followed a notable 12.8% increase in November. Economic sentiment showed weakness, with the one-year outlook decreasing by 9.7% to 94.6, and the five-year forecast falling by 11.7% to 95.7. Household financial perceptions also suffered, as evaluations of current conditions compared to the previous year fell by 5.0% to 80.9, and expectations for the coming 12 months dipped by 6.1% to 102.4. The index measuring the timing to purchase a major household item dropped by 11.4% to 98.9. On a more positive note, the view on unemployment showed improvement, decreasing by 9.1%, reaching 126.8. Mathew Hassan from Westpac noted that renewed concerns about interest rate trends were fueling wider apprehensions regarding the economic outlook. He warned that if inflation takes longer to return to normal levels, there is a risk that the cash rate could stay unchanged longer than currently anticipated.