Consumer spending goes up for the first quarter in six
Nasreen Seria in Business Report:
Consumer spending increased for the first time in six quarters in the final three months of last year, as wages increased and job losses eased, improving the outlook for growth this year.
Household expenditure increased an annualised 1.4 percent after dropping a revised 1.9 percent in the third quarter, the Reserve Bank said in its Quarterly Bulletin yesterday. Spending had contracted every quarter since the three months to September 2008 and fell 3.1 percent last year, the first annual decline since 1992.
Consumers account for two-thirds of expenditure in the economy and a recovery in spending will help to boost gross domestic product (GDP), which expanded an annualised 3.2 percent in the fourth quarter.
The rebound may add to pressure on the Reserve Bank to keep its benchmark interest rate unchanged at 7 percent tomorrow.
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