Retail spending growth over the year to the end of March was just 0.8 per cent – the weakest growth on record outside the pandemic and the introduction of the GST in 2000.
Shoppers have pulled back their spending on every retail category except for food as households struggle with high interest rates and sustained inflation, a strong sign the Reserve Bank may not need to raise interest rates further but economists remain cautious about the outlook for the May budget.
AMP deputy chief economist Diana Mousina said the figures showed consumer spending was clearly depressed.The retail spending data is the last key piece of information the Reserve Bank will receive before its two-day board meeting next week. “However, the RBA’s path forward remains uncertain. It will be closely monitoring real economic activity, wage growth and overall inflation data in the coming months and any surprises could delay any potential rate cuts, or even bring discussions of further rate hikes back to the table,” Rynne said.Australian Retailers Association chief executive Paul Zahra said ongoing cost-of-living pressures were making things tough for retailers.
Home values are up by 11.1 per cent, or $78,000 on the country’s median home value, since they bottomed out in January last year, with growth led by smaller capital cities such as Perth and Brisbane.
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