Australian consumer confidence has fallen sharply, hitting its lowest level in more than two years amid rising geopolitical tensions and surging oil prices following recent military strikes involving the United States, Israel and Iran.

The latest ANZ–Roy Morgan Consumer Confidence Index dropped 3.7 points to 73.4, marking the weakest reading since July 2023.

The result is 13.5 points lower than the same period last year and 5.8 points below the 2026 weekly average of 79.2, highlighting growing economic pessimism among households.

The decline was driven largely by deteriorating expectations around personal finances and the broader economy over the next 12 months.

According to the survey, fewer than one in five Australians (18%) say their family is financially better off than a year ago, while 47% believe they are worse off.

Expectations for the year ahead have also weakened significantly, with only 20% expecting their finances to improve, compared with 43% who believe they will be worse off.

Confidence in the national economy also continues to deteriorate. Just 6% of Australians expect “good times” for the economy over the next year, while 42% anticipate “bad times.”

Longer-term sentiment remains subdued as well. Only 9% believe the economy will experience good times over the next five years, compared with 29% expecting bad times.

Consumer willingness to spend has also softened. Only 18% of respondents say now is a good time to buy major household items, while 43% believe it is a bad time, reflecting ongoing cost-of-living pressures.

ANZ economist Madeline Dunk said global instability has likely contributed to the sudden drop in confidence.

“ANZ-Roy Morgan Australian Consumer Confidence declined 3.7 points last week, taking the series to its weakest level since July 2023,” Dunk said.

She noted that confidence around household financial conditions over the coming year has fallen to its lowest level on record.

Rising geopolitical tensions are also feeding into inflation fears. Since the Middle East conflict escalated, WTI oil futures have jumped around 30%, while Australian inflation expectations recorded their largest weekly rise since the series began in 2010, reaching their highest level since November 2022.

The surge in inflation expectations is likely to attract close attention from the Reserve Bank of Australia, with Governor Michele Bullock recently warning the central bank is monitoring inflation expectations closely to ensure they remain anchored.

State-level data showed consumer confidence falling across Victoria, Queensland, South Australia and Western Australia, while New South Wales recorded a modest increase.