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Satish Ranchhod,  Senior Economist at Westpac, offered his afterthoughts on New Zealand’s Retail Sales data released earlier this Monday.

Key quotes

“Retail spending rose by 2.7% in the March quarter. That followed a similar-sized fall in December. “

“Today’s result was stronger than our forecast for a 0.7% increase, and well above the median analyst forecast for a 1.8% decline in spending. This indicates upside risk for March quarter GDP growth.”

“Retail spending has been resilient since the economy exited lockdown. Spending appetites have been buoyed by the low level of interest rates, strength in the housing market and diversion of spending previously earmarked for overseas holidays back into the local economy. Those factors have helped to offset the drag from the loss of international tourist dollars.”

“We expect spending will continue to firm over the coming months. However, compared to pre-Covid trends, spending growth is likely to be constrained by the continued lack of international tourists and the slowdown in population growth.”