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Highlights
- Retail card spending was up 0.3% in November
- Consumables spending increases the most
- Spending on durables declines in the same month
According to StatsNZ data released on 9 December 2022, retail card spending rose NZ$21 million (0.3%) in the month of November as compared to October when adjusted for seasonal effects.
The data, keenly watched by the Reserve Bank of New Zealand (RBNZ) to tame inflation through OCR hikes, reflects the spending patterns of consumers.
According to the official statistics agency of New Zealand, the increase came largely from spending on consumables, up NZ$16 million.
According to Ricky Ho, the consumables spending category, which includes groceries and liquor, has been rising since July 2022.
However, spending on consumer durables reflected the largest fall in November, down NZ$18 million (1.1%). Total card spending registered a decline in October, down NZ$38 million.
According to analysts, the data showed that the demand was still very high, and the RBNZ could be very worried.
While households may not be spending more on durables, overall spending was not declining either. The report said consumers were instead directing their funds into areas like hospitality and apparel.
Consumables spending in September
Consumables include items that showed an upward trend in September. Kiwis ended up spending much more on liquor and groceries in the month of September as compared to other months. Ricky Ho also said that since food prices had increased in the past few months, it impacted consumable spending.
In the month of September, in actual terms, the cardholders made 158 million transactions across all industries, with an average value of NZ$54 per transaction. The total amount spent using electronic cards was NZ$8.6 billion.
Impact on monetary policy
In the month of November, the RBNZ forecasted that New Zealand was about to enter into a recession phase by mid-2023. In the last policy meeting, the RBNZ raised the OCR by 75 bps, taking the total OCR to 4.25%, its highest level since 2008.
The monetary policy committee will have its next meeting on 22 February 2023.