New Zealand retail spending on electronic cards rose in April on higher consumption of groceries and liquor, adding to expectations the central bank will signal an earlier interest rate increase at Thursday's review than previously forecast.
Retail spending on credit and debit cards rose a seasonally adjusted 1.1 per cent last month, following a 0.3 per cent decline in March and a 0.6 per cent decline in February, Statistics New Zealand said.
"The rise in retail card spending in April was driven by a record increase in grocery and liquor spending, which follows flat March and February months," business indicators senior manager Neil Kelly said. "This was the largest increase in grocery and liquor spending since the series began."
The Reserve Bank is widely expected to keep rates on hold at 1.75 per cent on Thursday but economists are expecting it to rejig its forecasts to show rate increases coming sooner than its previous forecast of late 2019 as inflation pressures begin to emerge. It's keeping a close watch on consumer spending, amid concerns people are more willing to fund retail purchases with debt, and today's figures show credit cards accounted for 48.8 per cent of transactions, down from 49.7 per cent in March, though still up from 45.7 per cent a year earlier.
Spending rose in three of the six retail industries in April, the government department said. The largest movements were consumables, with spending up 2.2 per cent, and durables, up 1.3 per cent. Hospitality spending rose 0.7 per cent while apparel spending fell 1.2 per cent.
