SYDNEY (REUTERS) – Australian retail sales rose less than expected in May, with a snap coronavirus lockdown in the country’s second most populous state of Victoria hurting demand, preliminary data showed on Monday.
Retail turnover gained 0.1 per cent in May from a month earlier after jumping 1.1 per cent in April, according to figures from the Australian Bureau of Statistics (ABS). Median forecasts of economists polled by Reuters had shown they expected a 0.5 per cent increase.
Final results will be released on July 5.
Australia has been largely successful in curbing the coronavirus pandemic by imposing strict physical distancing measures and shutting its international borders. However, it has been plagued by small outbreaks in different parts of the country, leading to snap lockdowns and travel restrictions.
Sales in Victoria, which in May entered its fourth lockdown since March 2020, fell 1.5 per cent with declines across all industries except food retailing where spending increased in the lead up to the lockdown.
Nationally too, food retailing led the rises, offset by falls in household goods retailing and clothing, footwear and personal accessories.
A surprisingly strong rebound in consumer spending since the middle of last year, thanks to record low borrowing costs and the government’s fiscal largess, has boosted growth in Australia’s A$2 trillion (US$1.50 trillion) economy.
Analysts expect private consumption to remain strong for some while yet led by solid employment growth, tax offsets for low and middle income earners, rising house prices and all-time low mortgage rates.
Still, the Reserve Bank of Australia (RBA) is seen likely to keep rates at a record low of 0.1 per cent for a long time to come awaiting a pickup in inflation, which has undershot its 2-3 per cent target band for several years now.