The retail industry continues to call for the Reserve Bank to lower interest rates so it will be in line with overseas equivalent countries.
The RBA will meet for the first time this year in February.
Australian Retailers Association (ARA) executive director Russell Zimmerman said slow retail growth in a number ofc ategories over the recent Christmas period along with sluggish housing, business and consumer confidence figures are a stark economic yardstick that the economy continues to be under budget stress.
“Australia has comparatively high interest rates compared to equivalent performing economies in Canada, New Zealand and Norway, which have cut interest rates to 1 per cent, 2.5 per cent and 1.5 per cent respectively and has resulted in the Australian dollar being driven to record consistent highs affecting the economy,” he said.
“For some time economists have recognised the potential problems through the ‘Dutch disease’. We are now facing significant issues through the value of the Australian dollar along with the hangover from the GFC stimulus Government spending, affecting productivity and consumer confidence along with housing prices continuing their stagnation which has lead to low levels of retail sales growth.”
Zimmerman also highlighted while initial Christmas sales have so far been better than last, more needs to be done.
“While Christmas sales initially appear to have been a little better than last year we know some categories were down and sales growth was still well below historic levels,” he said.