Business and consumer confidence set to tumble

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The chief economist of an ETF provider has predicted consumer and business confidence are both set to fall.

Reports due out this week will reveal how consumers and business operators are feeling about the economy. NAB is set to release its January Business Confidence Report on Tuesday, while the Westpac Melbourne Institute Consumer Confidence Index for February is due out on Wednesday. BetaShares chief economist David Bassanese has predicted both will fall.

"In view of ongoing financial market volatility and heightened talk of an increase to the goods and services tax, chances are that both the Westpac and NAB measures of consumer and business confidence, respectively, will take a tumble this week," he said.

Bassanese said a decline in both reports would demonstrate the fragility of confidence in the economy.

“That said, falling petrol prices could provide some support to consumer sentiment, while gathering strength in non-mining services sectors thanks to a cheaper Australian Dollar may also help bolster business sentiment," Bassanese said.