At its latest meeting this week (April 2) the Reserve Bank of Australia has decided to leave the official cash rate at the unchanged level of three per cent.
The last time the cash rate was reduced was in December 2012, when the RBA decided to reduce it by 25 basis points, bringing it down to a low figure last seen around the time of the global financial crisis.
This latest decision to leave it unchanged was due to the lower rate of global growth predicted for the year.
However, domestic growth is aligned with trends seen in 2012, with vast capital spending in the resources sector leading the way.
RBA governor Glenn Stevens said in a statement that there has been a moderate increase in private consumption spending, with lesser Australians seeking credit. This indicates that people are wishing to reduce the amount of debt that they have.
Chief executive of the Australian National Retailers Association (ANRA) Margy Osmond stated that retailers in Australia need to keep their hopes low for a future cash rate cut, and instead hope for winter sales to lift the quarter.
“Consumers need confidence to return to shopping consistently. For the past few years we have seen boom and bust months across the retail sector and very little consistency in shopping in the discretionary spend area, while food has kept figures from tumbling to new lows,” said Ms Osmond.
Ms Osmond commented that although there have been some positive retail figures so far this year, overall the figures remain quite flat and “any minor economic shock will send them back to saving rather than spending”.
These figures highlight the importance of having a comprehensive retail strategy in place in order to keep sales volumes up and stay aligned with business goals and objectives.