footbridge over body of water

Australia’s retail sales rose 0.2% in February as inflation and rising interest rates weigh on consumers

Australia’s retail sales rose by a modest 0.2% in February to AUD 35.14 billion ($23.48 billion), according to the Australian Bureau of Statistics (ABS). The figure marks a significant slowdown from the 1.8% increase recorded in January. Analysts attribute the slower growth to rising living costs and interest rates, which are hurting consumers’ spending power. Ben Dorber, ABS’s chief retail statistician, noted that “On average, retail spending has been relatively flat throughout 2022 and continuing into early 2023.”

Despite the weak retail data, February’s retail sales exceeded analysts’ expectations of a 0.1% increase, and sales for the month increased 6.5% year-on-year. The sluggish retail performance contrasts with recent strong economic data releases, which could make the Reserve Bank of Australia’s (RBA) picture of the economy more opaque. The RBA recently hinted that it may halt rate hikes at its April monetary policy meeting to assess the impact of consecutive interest rate hikes in its past ten meetings.

Inflation data is scheduled to be released on Wednesday, which is expected to inform the RBA’s decision. Analysts predict that the Consumer Price Index (CPI), a measure of consumer spending, will drop to 7.1% in July from 7.4% in January.

Leave a Reply

%d bloggers like this: