(Adds trade data, GDP forecasts, analyst comment)
By Wayne Cole
SYDNEY, Feb 28 (Reuters) - Australian retail sales
rebounded in January after a surprise plunge in December that
owed much to changing spending habits, though the underlining
pulse was facing headwinds from high inflation and rising
interest rates.
Data from the Australian Bureau of Statistics (ABS) on
Tuesday showed retail sales rose 1.9% in January from December,
when they dived 4.0%. Sales of A$35.1 billion ($23.67
billion)were 7.5% higher than a year earlier.
That topped median forecasts of a rise of 1.5%, but showed
little growth over the three months from November.
"Looking through this volatility shows that turnover is at a
similar level to September 2022, and on average, growth has been
flat over the past few months," said Ben Dorber, ABS head of
retail statistics.
Still, data for spending on bank cards also suggests
consumers have been splashing out on services, particularly
travel, rather than on the goods covered by the retail report.
The overall resilience of consumer demand is a major reason
analysts forecast the economy as a whole grew by a solid 0.7% in
the December quarter, and 2.7% for the year.
Figures for gross domestic product (GDP) are due on
Wednesday and should show a sizeable contribution from
international trade as resource exports boomed.
ABS data on Australia's current account showed the surplus
widened sharply to A$14.1 billion in the fourth quarter, while
net exports added 1.1 percentage points to GDP.
High prices saw exports of mining commodities top A$400
billion for the first time in 2022.
Government spending also added 0.1 percentage points to GDP
growth, while drags are seen coming from inventories, housing
and consumer spending on goods.
"It's clear that high inflation and rising interest rates
are weighing on consumer spending," said Sean Langcake, head of
macroeconomic forecasting for BIS Oxford Economics.
"With spending still rebalancing toward services and weaker
fundamentals for consumption growth, we expect retail sales
growth will be quite patchy over 2023."
The Reserve Bank of Australia (RBA) has already lifted rates
by 325 basis points to a decade-peak of 3.35%, and markets are
wagering on further hikes toward 4.35%. The central bank expects the economy to grow a sub-par 1.4%
this year and 1.6% next, a slowdown that will hopefully bring
demand back in line with supply and help curb inflation.
($1 = 1.4830 Australian dollars)
(Reporting by Wayne Cole; Editing by Jacqueline Wong and Himani
Sarkar)
Messaging: wayne.cole.thomsonreuters.com@reuters.net))
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