By James Glynn
SYDNEY–Australian consumer confidence dropped 7.6% last week to the lowest levels since the economy experienced a damaging recession at the start of the 1990s, according to a survey by ANZ Bank and pollster Roy Morgan.
ANZ head of Australian economics David Plank said news of a 50 basis-point rise in official interest rates by the Reserve Bank of Australia last week surprised many and sharply dented confidence.
Confidence is at its lowest since early April 2020, during the early stages of the Covid-19 pandemic. Outside of the pandemic, consumer confidence hasn’t been this low since January 1991, the midst of the early 1990s recession, Mr. Plank added.
Reflecting the dire state of sentiment, the percentage of respondents who expect good times for the economy over the next five years dropped to 10%, its lowest level on record, he said.
So far this year household spending has been resilient despite the softness in consumer confidence. The RBA, for one, will be looking closely to see whether this divergence can continue, Mr. Plank added.
Weekly inflation expectations decreased 0.1 percentage point to 5.6%, while its four-week moving average was unchanged at 5.5%, the survey showed.
Sentiment around current financial conditions dropped 1.0%, while future financial conditions fell 10.1%. Current economic conditions declined 7.2% after a 9.4% loss the week before. Future economic conditions were down 4.6%, according to the survey.
Consumers also reported a 14.4% drop in their willingness to buy a major household item.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,454 interviews conducted online and over the telephone during the week to Sunday.
Write to James Glynn at James.Glynn@wsj.com