Australia’s consumers spent less than expected in March as the Reserve Bank’s series of interest rate rises forced households to tighten their purse strings. A separate trade report showed the gap blowing out to beyond AUD2 billion (USD1.81 billion).
The Australian Reserve Bank has raised interest rates six times since October, lifting them from a 50 year-low of 3 percent, to 4.5 percent earlier this week. Retail spending has also eased off as the effects of government cash handouts during the financial crisis lose their effect.
Some retailers have reported weaker demand, with whitegoods retailer Clive Peeters this week cutting its profit outlook, as did Fantastic Furniture. Last week, grocery giant Woolworths pared back its 2010 sales forecast.