Retail sales of electronic cards in New Zealand fell marginally in September 2008 due to the downfall in clothing and durables sales on account of high inflation and scarcity of credit.
According to the Statistics New Zealand (SNZ), retail spending on electronic card in the country dipped fractionally in September 2008, as reported by Forbes.
In September 2008, the transactions of electronic cards, including credit, debit and charge cards that were used at POS, revealed that the retail expenses declined by about NZ$ 400,000 to NZ$ 3.771 Billion ($2.299 Billion). This fall is noticed after a 1% increase recorded in August 2008.
Further, electronic transactions for core retail groups, excluding automobile-related industries, suffered a seasonally-adjusted fall of 0.4%, the first dip since June this year. Moreover, seasonally-adjusted expenditure on electronic cards, comprising of transactions in industries except retail, increased 0.8%. It is the third subsequent rise, preceded by 0.9% increase in August 2008.
The flat retail sales of electronic cards in September 2008 are credited to the slump in sales of durables and clothing. Since the inflation rate in New Zealand is at the record high, the domestic demand died out and the consumers are cutting down their expenditure. Further, high interest rates and a weak housing market are also suppressing the domestic demand in New Zealand.
Moreover, the confidence of New Zealand consumers is going down as the chaos in worldwide credit market is making the doubts on economic recovery from the recession witnessed in first half even more intense. Also, depreciation of the New Zealand dollar against other major currencies has posed a threat in the form of rising inflation and is further reducing the consumer spending.
The New Zealand government is making every possible effort in order to improve the present situation. Probably, the Reserve Bank of New Zealand will slash the benchmark interest rate by one percentage point to 6.5% to support the economy of the country. Consequently, easy credit will enable the consumers to spend more.
According to the research analyst at RNCOS, “The decrease in the retail sales of electronic cards is a direct indication of reduced consumer expenditure in New Zealand. Though the prices of fuel have fallen in the country, consumer expenditure is still under immense pressure that has been created by high rate of inflation and the credit crisis. But as the banks are preparing to bring down the rates of interest, the conditions seem to ease out a little bit.”
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