Satish Ranchhod, senior economist at Westpac, notes that the New Zealand’s retail spending rose by 0.9% in February, thereby reflecting a return to trend for retail spending after some sharp swings in recent months.
Key Quotes
“Importantly, it reinforces our expectations for a rebound in economic growth in early 2019. That follows the reversal of the sharp oil price increases that dampened spending last year. Retail spending is also being boosted by the increases in government spending now rippling through the economy (including transfers to households as part of the Governments’ Families Package).”
“February’s increase in spending was mainly related to increased spending on groceries, liquor and hospitality. Spending on durable items, in contrast, flattened off.”
“Looking to the year ahead, we expect spending will continue to grow at a moderate pace, supported by growth in nominal incomes, lower petrol prices, and the boost to the housing market from low mortgage rates. Longer-term, spending growth will be challenged by factors such as slowing population growth.”
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