Aussie consumers pessimistic of local economy: survey

Australian consumers are becoming more pessimistic of the local economy as market volatility, growth concerns and mixed signals from the nation's leaders of the economic landscape dampen confidence.

The Westpac Bank and Melbourne Institute survey of consumer sentiment, released Wednesday, dropped 4.0 percent in April, adding to a 2.2 percent fall in March.

At 95.1 points, the index is below 100, 1.1 percent lower than the same time last year, indicating there are more pessimists than optimists about the economy.

Westpac economists suggested local market developments are continuing to create unease with continued bearish outlooks of global growth, while a stronger Australian dollar may impact the local economy's rebalancing to services exports to become adverse on future growth.

Australian consumer sentiment is as stark divergence to the National Australia Bank business confidence survey, released Tuesday, that showed they were enjoying their best conditions in nearly a decade, with sales, profits and employment rising.

Though the two survey's largely cancel the impact on the central bank's policy position, the longer consumer confidence remains soft, business sentiment risks being dragged lower on fears of weak spending, AMP Capital chief economist Shane Oliver told Xinhua.

"That's the risk we face. At some point we need to see consumer confidence pick up to be confident consumer spending will remain solid," Oliver said.

Debate surrounding Australia's economic outlook may also be playing on consumer sentiment, with leading economists warning the country risks its coveted AAA credit rating being downgraded should the fiscal and debt situation not be tackled.

Australian Treasurer Scott Morrison, who will deliver his first budget on May 3, has promised to "live within its means" in tackling the ongoing budget deficit despite not outlining any revenue raising initiatives, making consumers uneasy. Endit