“Some of this will be due to higher prices, but it appears there is still a lot of ‘catch-up’ spending going on by consumers, particularly in the apparel, footwear and personal accessories sectors and department stores,” she said.
ANZ chief economist Adelaide Timbrell said one of the factors supporting the retail sector was the gradual return of Australian tourists and expats.
A net number of 110,600 people entered the country in July against a net exodus of 150,500 people in June.
Timbrell said net arrivals overseas would continue to support retail trade, downplaying concerns that the sector was on the verge of a sharp decline.
“We expect consumption to slow down going forward, and ANZ spending shows slightly slower spending momentum in August compared to ‘normal’ seasonal variation, but we are still a long way from seeing a spending cliff,” she said.
But Commonwealth Bank chief economist Belinda Allen warned that July’s rise largely occurred before consumers began to feel the full impact of this month’s interest rate hike. the.
“At Commonwealth Bank, for example, there is on average a three-month lag between an increase in the exchange rate and the higher refund being deducted from a customer’s bank account,” she said.
“Between August and December, this impact on interest rates quadruples based on the policy changes already announced. This impact will increase again depending on what the RBA does to the cash rate in September and beyond.”
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