The Reserve Bank does not believe the emergence of Omicron will derail the economic recovery as Australians more broadly look set to spend big in the run-up to Christmas.
But the International Monetary Fund believes uncertainty around the economic outlook remains high, warning renewed domestic virus outbreaks would pose downside risks to economic growth.
"By contrast, effective containment of the pandemic during the reopening could restore sentiment more quickly, with a faster recovery in household consumption and business investment," the IMF says in its final report on Australia for 2021.
The IMF is forecasting the Australian economy to grow by 4.1 per cent in 2022 after 3.5 per cent in 2021.
"The Australian economy has continued to demonstrate its remarkable resilience in the face of the pandemic," Treasurer Josh Frydenberg said.
RBA governor Philip Lowe said the Australian economy is recovering from the setback caused by the Delta variant and expects growth to return to its pre-lockdown path in the first half of 2022.
"The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery," Dr Lowe said in a statement following the RBA's final board meeting of the year on Tuesday.
The RBA left the cash rate at a record low 0.1 per cent and reiterated it won't lift it until inflation is sustainably within the two to three per cent target.
"This is likely to take some time and the board is prepared to be patient," Dr Lowe said.
The weekly ANZ-Roy Morgan consumer confidence index rose 1.4 per cent to a one-month high, while its inflation expectations index rose one percentage point to 4.9 per cent, staying close to a recent seven-year high of five per cent.
"Consumers are positive about the outlook despite the news about the Omicron variant," ANZ head of Australian economics David Plank said.
"The sustained jump in inflation expectations doesn't seem to have had a major impact on sentiment."
A separate survey suggests consumers are set to spend some of the estimated $240 billion of savings accumulated during the COVID-19 pandemic heading into Christmas.
The Commonwealth Bank household spending intentions index rose 2.1 per cent during November to 110.3, its highest level since December 2019, and recovering all the lost ground during the pandemic.
CBA chief economist Stephen Halmarick said the index has shown a continued and broad based recovery in consumer spending since the end of lockdowns.
The index posted solid gains in November for spending on transport, up 21.5 per cent, travel rising by 14.7 per cent, retail gaining by 9.6 per cent and household services up 9.4 per cent.
The index combines an analysis of CBA payments data, loan application information and publicly available search activity through Google Trends.
The report was a further sign of the nation rebounding from the economic contraction in the September quarter caused by the lockdowns in NSW, Victoria and the ACT.
However, Australia's services industry has yet to join in the recovery, albeit stabilising after three months of decline.
The Australian Industry Group performance of services index rose two points in November to 49.6, bordering on the 50-point mark that separates expansion in the industry from contraction.
Ai Group chief executive Innes Willox said the sector has underachieved relative to expectations of a more convincing recovery after the COVID-19 downturn in recent months.
"Service businesses will be hoping for a stronger rebound in performance over the holiday months," Mr Willox said.
Australian Associated Press