SYDNEY, May 19 (Reuters) – Australia’s consumer sentiment rose in May as the oil shock triggered by the Iran war showed signs of easing slightly, but uncertainty over energy supplies and the third straight rate hike by the central bank this month kept the overall mood glum.
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment rose 3.5% to 83 in May from April, when the index slumped 12.5% to its lowest in more than two years due to concerns over the Middle East conflict.
A reading below 100 means pessimists considerably outnumber optimists.
“Despite a small improvement, consumers remain deeply pessimistic,” Westpac’s Head of Australian Macro-Forecasting Matthew Hassan said in a statement.
“Forward views are clearly still being weighed down by uncertainty around global energy supply with the Strait of Hormuz still effectively shut. However, rate rise fears are also in the mix,” he added.
Minutes of the Reserve Bank of Australia’s May board meeting released on Tuesday showed the central bank judged interest rates to be restrictive after three hikes this year, giving it space to watch how the Iran war plays out even as inflation is expected to rise and economic growth slow.
(Reporting by Renju Jose in Sydney;Editing by Shri Navaratnam)
