The Reserve Bank of Australia’s (RBA) decision to pause rate increases this month has been welcomed by the National Retail Association (NRA).
After ten consecutive rate increases, the RBA decided to leave the cash rate target unchanged at 3.6 per cent in order to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook.
Greg Griffiths, CEO of the NRA, said the industry is thankful the RBA has put down its hammer long enough to assess the impact of its monetary policy.
“Retail spending remained flat in the month of February. Data released by the Australian Bureau of Statistics revealed a 0.2 per cent increase in retail turnover, down from a 1.8 per cent increase in January.
“Inflation is down 6.8 per cent from 7.4 per cent last month, which comes as no surprise given consumers are reining in their spending even on non-discretionary items.”
Philip Lowe
Griffiths said that this period of relief presents an opportunity for businesses to get on top of labour shortages and the continued supply chain issues that exacerbate inflation and put a strain on retail growth.
“The retail sector needs targeted support to ensure Australia’s small and medium sized business community can get on top of their expenses before they are hit by another economic challenge.
“With the Federal Budget just a couple of months away, the government should be considering relief packages for businesses who are at risk of shutting down.”
The RBA stated that in assessing when and how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.
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