A major bank economist has warned that negative consumer sentiment could have drastic effects for the Australian economy.
chief economist Warren Hogan has told the Committee for the Economic Development of Australia’s State of the Nation Conference that consumer sentiment has been dampened by mass job loss announcements in the first half of the year, combined with the release of the Federal Budget, News Ltd has reported. Hogan said over the last 25 years, consumer confidence only reached lower levels during the GFC and the 1991 recession.
"There's been a significant negative response to the budget, both the lead-up leaks and the actual report," Hogan said.
Hogan predicted that consumers would not drive the Australian economy over the next few years.
"It won't do what it did after the Asia crisis in the late 1990s and leverage up, build and buy houses and buy lots of products and cause economic activity to lift," he said. "We cannot have a consumer that's going into hibernation."