Australian consumer sentiment slumped to 15-year lows in June as surging petrol and living costs pressured family finances, a survey showed on Wednesday, suggesting household spending could yet fall further.
The Westpac-Melbourne Institute consumer sentiment index dropped 5.6 percent to 84.7 in June, a 30.3 percent dive on the same month last year.
"This is a most surprising result," said Bill Evans, chief economist at Westpac. He noted that such large declines usually followed increases in interest rates, yet the Reserve Bank of Australia (RBA) kept rates on hold this month.
"The index is now at its lowest level since December 1992 when the economy was still recovering from the recession of a few years earlier," said Evans.
Inflation seemed the likely culprit with 61.8 percent of 1,200 respondents in the survey recalling hearing news on inflation, up from just 15.2 percent a year earlier.
In particular, petrol prices had climbed almost 8 percent in the weeks since the May survey.
"Petrol prices are likely to have been the main culprit behind for this sharp fall in the index," said Evans. "Naturally consumers have become much more negative on inflation; interest rates; and domestic and international economic conditions over the last year."
Sentiment has taken a battering in recent months as the Reserve Bank of Australia (RBA) raise rates twice to a 12-year high, while the surging cost of everything from fuel to food sapped household buying power.
The survey's measure of family finances compared to a year ago fell by 11.8 percent in June, to be 33.7 percent below its level a year ago.
The index measuring expectations for economic conditions over the next 12 months fell by 14.5 percent, while that for the next five years dropped by 5.5 percent.