Australian consumer confidence takes another dive
A survey by Westpac bank and the Melbourne Institute has revealed that Australian consumer confidence took another dive in June.
The study, which questioned 1,200 people, found that consumer morale in June fell by 5.7% to a reading of 101.9 and followed a 7% drop in May.
The fall was attributed to global economic worries and a new mining tax. Last month’s fall was linked to the ongoing hikes in Australian interest rates.
Australia was the first economy to raise rates from a 50-year low as the economic downturn eased. Other major economies opted for lower interest rates to boost their economies.
However, the country is one of the few developed economies not to have fallen into recession like its counterparts throughout the world as it has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.
Commenting on the figures, Westpac chief economist Bill Evans, said: “The cumulative 12.3% fall in the index over the last two months represents the largest two-month fall since March 2008.”
However, this month’s fall was not linked to interest rates after the Reserve Bank of Australia opted to keep interest rates at 4.5%“, said Mr Evans.
He believes the fall is “a mixture of concerns about deteriorating conditions abroad, financial market turmoil and uncertainty around the Government’s proposed Resource Super Profits Tax.”
Australia recently unveiled a new tax on mining projects from July 2012, which resulted in a backlash from major mining companies such as Xstrata, BHP Billiton and Rio Tinto.
The companies opted to suspend or place under review projects worth billions of dollars, warning the tax will risk economic growth in regional Australia by driving future investment and jobs overseas.
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