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Australia’s consumer sentiment hits six-month low amid inflation fears

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Australia’s consumer sentiment hits six-month low amid inflation fears



Australia’s consumer sentiment fell to its lowest level in six months, with the Westpac–Melbourne Institute Consumer Sentiment Index declining 3.5 per cent to 92.1 in October from 95.4 in September. Confidence has dropped 6.5 per cent over the past two months.

The October index read is now at firmly pessimistic levels, albeit still well above the very weak reads seen during the extended ‘cost-of-living’ crisis, according to Westpac.

Australia’s consumer sentiment fell to a six-month low, with the Westpac–Melbourne Institute Index dropping 3.5 per cent to 92.1 in October.
Inflation concerns and uncertainty over interest rates have dampened optimism, particularly regarding family finances, which fell nearly 10 per cent.
Despite weaker confidence, job security fears remain limited.

“Consumers appear to have been rattled by recent updates on inflation. ‘Partial’ measures released over the last month suggest annual inflation has lifted back towards the top of the RBA’s 2–3 per cent target range,” said Matthew Hassan, head of Australian macro-forecasting at Westpac in an article titled, ‘Westpac-MI Consumer Sentiment Bulletin’.

Although the Reserve Bank of Australia’s (RBA) decision to hold rates steady in September provided some relief, sentiment remained firmly pessimistic.

The weakening was most pronounced in expectations for family finances, with the ‘family finances, next 12 months’ sub-index plunging nearly 10 per cent to 97.1—its lowest in over a year. Current assessments also fell 4.8 per cent to 82.1, suggesting that the boost from previous rate and tax cuts may be fading.

Short-term economic outlook expectations slipped 2.5 per cent to 89.9, while longer-term views edged up 1.4 per cent to 94. Meanwhile, the ‘time to buy a major household item’ sub-index dipped 1.1 per cent to 97.2, reflecting continued caution in consumer spending ahead of the holiday season.

Despite weaker confidence, consumers remain largely unconcerned about job security. The Unemployment Expectations Index dropped 2.9 per cent to 127.6. That takes the index slightly below its long-run average but still broadly consistent with a stable labour market.

“The Reserve Bank Monetary Policy Board (MPB) next meets on November 3–4. With inflation within the target range and monetary policy still a little on the restrictive side, the next rate move can reasonably be expected to be down. However, the MPB remains cautious, especially after the stronger than expected result for the August CPI indicator, and it will be sensitive to the flow of data from here. A cash rate cut in November is far from assured, though neither is it off the table,” added Hassan. “And the longer the MPB delays further cuts, the more likely it is that it will end up cutting by more than it currently envisages.”

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IMF to give specific attention to low-income, vulnerable nations

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IMF to give specific attention to low-income, vulnerable nations



The International Monetary Fund (IMF) will continue to support countries in their efforts to promote stability and growth, including through sound macroeconomic policies, domestic resource mobilisation and better governance, with specific attention to low-income and vulnerable countries, Mohammed Aljadaan, Minister for Finance of Saudi Arabia and chair of its International Monetary and Financial Committee (IMFC) said at the 53rd meeting of the committee.

Such countries include fragile and conflict-affected states and small developing states, especially where debt and financing pressures are mounting, he noted in his statement.

The IMF will continue to support countries in their efforts to promote stability and growth, including through sound macroeconomic policies, domestic resource mobilisation and better governance.
The chair of its International Monetary and Financial Committee said this support will include specific attention to low-income and vulnerable countries.
The committee called for enhanced debt transparency.

“We remain committed to further improving debt restructuring processes, including under the Common Framework, building on the progress already achieved, and advancing the work at the Global Sovereign Debt Roundtable (GSDR) to ensure debt restructurings are delivered in a predictable, timely, orderly and coordinated manner,” he said.

The committee called for enhanced debt transparency from all stakeholders, including private creditors.

“We will advance structural reforms to enable private sector-led investment, increase productivity, safeguard energy security, and elevate medium-term growth prospects,” added Aljadaan.

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Germany firms raise investment plans, uncertainty persists: ifo

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Germany firms raise investment plans, uncertainty persists: ifo



Companies in Germany have revised their investment plans upwards for the current year, with the ifo investment expectations index rising to 0.2 points in March from -3.1 points in December 2025.

“The improved order situation in industry has brightened sentiment somewhat. However, as a result of the Iran war, energy costs have risen sharply, and uncertainty among companies has also increased. That runs counter to a stronger economic recovery,” said Timo Wollmershauser, head of forecasts at ifo.

Firms in Germany have raised investment plans, with ifo expectations rising to 0.2 points in March from -3.1 in December 2025.
Industry led gains, especially non-energy sectors, while energy-intensive segments and chemicals remained weak.
Services showed modest optimism, but trade stayed pessimistic.
Rising energy costs and geopolitical uncertainty temper recovery.

The most notable rise in the willingness to invest was in industry. Expectations rose to +0.1 points in March, up from -6.9 points in December. The outlook improved particularly strongly in non-energy-intensive industries, where significantly more companies were planning to expand their investments this year, ifo said in a press release.

In energy-intensive industries, however, the willingness to invest remains subdued. At -9 points in March, the balance remained virtually unchanged from December (-8.9 points). In the chemical industry, investment expectations even declined further, from -15.8 to -16.2 points.

Overall, the corresponding balance in manufacturing rose from -4.1 to +1.2 points. “Companies across all sectors also want to invest more in software. The growing use of artificial intelligence is likely to play a role in that,” said ifo economic expert Lara Zarges.

In trade, companies remain the most pessimistic. The balance of investment expectations stood at -9.6 points in March, virtually unchanged from the level in December. Service providers, on the other hand, confirmed their slightly positive outlook from December: Their investment expectations improved from +1.1 to +2.8 points.

The points for the ifo investment expectations indicate the percentage of companies that intend to increase their investments on balance.

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Global energy growth slows to 1.3% in 2025: Report

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Global energy growth slows to 1.3% in 2025: Report



Global energy demand growth moderated to 1.3 per cent in 2025 amid a complex economic and geopolitical backdrop, while electricity consumption continued to expand strongly, according to the latest Global Energy Review by the International Energy Agency (IEA).

The report highlighted that although overall energy demand growth slowed compared with 2024 and remained slightly below the previous decade’s average, electricity demand rose by around 3 per cent, driven by increased usage across buildings, industry, electric vehicles, and data centres.

Global energy demand growth slowed to 1.3 per cent in 2025, while electricity demand rose around 3 per cent, driven by EVs, industry, and data centres, according to IEA.
Solar PV led supply growth for the first time.
Oil demand grew modestly, and coal growth slowed.
CO2 emissions rose slightly.
Renewables and nuclear expansion highlighted an accelerating shift towards cleaner energy systems.

Solar photovoltaic (PV) emerged as the largest contributor to global energy supply growth for the first time, accounting for over 25 per cent of the increase. Natural gas followed with a 17 per cent share, while renewables and nuclear together met nearly 60 per cent of additional demand.

Global oil demand rose modestly by 0.7 per cent, reflecting the continued expansion of electric vehicles, with sales surpassing 20 million units in 2025. Coal demand growth slowed overall, with declines in China offset by increases in the United States due to high natural gas prices.

“Global energy demand continued to increase in 2025 against a complex economic and geopolitical backdrop, with one trend unmistakeable: the expanding electrification of economies,” said Fatih Birol, IEA executive director.

He added that electricity consumption was growing much faster than overall energy demand, with one energy source outpacing all others. He noted that solar PV accounted for over a quarter of global energy demand growth for the first time, followed by natural gas, and added that countries prioritising resilience and diversification would be better placed to manage volatility and ensure secure, affordable energy.

Regional trends varied significantly. Energy demand growth in the United States rose sharply, supported by industrial activity, data centre expansion, and colder weather, while China’s growth slowed to 1.7 per cent due to rising renewable adoption and improved efficiency.

Global energy-related CO2 emissions increased marginally by around 0.4 per cent. Emissions declined in China and remained flat in India, aided by renewable deployment and favourable weather conditions, while advanced economies recorded higher emissions growth due to colder winter conditions.

In the power sector, solar PV generation surged by a record 600 terawatt-hours, marking the largest annual increase for any electricity generation technology. Battery storage emerged as the fastest-growing segment, with around 110 gigawatts of new capacity added, while nuclear energy also saw renewed momentum with over 12 gigawatts of new reactors under construction.

The IEA noted that cumulative deployment of low-emissions technologies since 2019 now offsets fossil fuel consumption equivalent to the entire energy demand of Latin America, underscoring the accelerating transition towards cleaner energy systems.

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