Australian retail sales surged by 1.9% in January, exceeding expectations and indicating strong demand despite the Reserve Bank of Australia’s (RBA) continuous interest rate hikes since May 2021. According to the Australian Bureau of Statistics (ABS), this latest data confirms that Australian consumer demand is steadily recovering.
The January retail sales figures also showed that sales at department stores increased by 8.8%, while sales at cafes, restaurants, and takeaways rose 1.2%. However, retail activity in Australia has been highly volatile in recent months due to changing consumer spending patterns. Many consumers moved their shopping to November instead of December, causing retail sales to rise 1.7% in November and then drop by 4% in December.
Despite the strong rebound in retail sales, the RBA may continue to raise interest rates in the coming months, with at least two more rate hikes expected. The central bank has already increased the policy rate by 25 basis points to 3.35% at its meeting on February 7th, marking the ninth consecutive month of hikes and the longest on record.