SYDNEY (Reuters – In December, a decline in Australian consumer sentiment occurred as the Omicron strain erupted. It hampered the outlook for Australia’s economy and its spending during the holiday period.

On Wednesday, the Westpac-Melbourne Institute Index of Consumer Sentiment fell by 1.0% from December to erase November’s 0.6% gain.

The index reading dropped 6.9% to December 2013 but at 104.3 it still indicated that optimism was outnumbered by pessimists.

Bill Evans, Westpac’s chief economist, noted sharp declines in Victoria and New South Wales, where the COVID-19 rates were at their highest. Survey results also revealed more concerns about inflation rising, which could have affected spending plans.

According to the survey, December’s index of when it is a good time for buying a household item fell 5.3% to more than 13% below a year earlier.

Evans said that 2022’s strong growth prospects are dependent upon a rise in consumer spending. This is because households will re-emerge form restrictions and pull down large savings from COVID lockdown periods.

According to the survey, 1.6% of respondents thought the economy would be worse in 12 months. However, 0.5% said the same thing for five years.

However, relative to one year ago, the family financial measure grew 1.0% while the finance over the next 12 month rose 2.1%.