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Australia Consumer Sentiment Weakens In December

Australia's consumer sentiment weakened in December in consistent with sharp decline in consumer spending in the third quarter, survey data from Westpac showed on Wednesday.

The Westpac-Melbourne Institute Index of Consumer Sentiment declined 1.9 percent to 95.1 in December.

All components of the index recorded declines in December. The 'economy, next 5 years' sub-index fell 2.4 percent in December and the 'economy, next 12 months' sub-index dropped 1.1 percent.

Likewise, the 'finances vs. a year ago' sub-index was down 3.6 percent and the 'finances, next 12 months' sub-index slipped 0.5 percent. Westpac said this continue to disappoint given interest rate cuts, the A$7.7 billion in personal income tax relief rolled out since July and the turnaround in house prices in most markets.

The 'time to buy a major household item' sub-index dropped 2.1 percent in December. Meanwhile, the Westpac-Melbourne Institute Unemployment Expectations Index gained 1.1 percent to 138 in December.

At the same time, the 'time to buy a dwelling' index fell 5.6 percent in December.
The Reserve Bank Board next meets on February 4. Westpac expects that the Board will decide to cut the cash rate by 0.25 percent to 0.5 percent.

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