KEY POINTS:
Growth in New Zealand consumer spending on debit, credit and store cards stalled in September amid weaker sales at clothing and appliance stores.
The value of transactions on electronic cards at retailers was unchanged from July when it rose 1 per cent, Statistics New Zealand said yesterday.
Transactions excluding fuel, workshop and vehicle sales fell 0.4 per cent from August when they rose 1.6 per cent.
Reserve Bank Governor Alan Bollard will probably cut the benchmark interest rate by one percentage point to 6.5 per cent this week to kick-start the economy, according to the median forecast of 14 economists surveyed by Bloomberg News.
"Domestic demand continues to wane," said Stephen Toplis, head of research at BNZ in Wellington.
"The Reserve Bank now has the green light to push interest rates aggressively downward."
The slowdown in the pace of card spending was led by the apparel industry and by sales of durables, which include appliances and computers, the statistics agency said. There was an offsetting increase in spending at fuel outlets and of consumer goods, such as food.
Consumer confidence dropped for a second straight week, according to a poll published yesterday.
Thirty seven per cent of 1000 people polled last week said the economy would improve in the next 12 months, according to a Colmar Brunton poll for Television New Zealand. Optimism fell from 38 per cent a week ago and 50 per cent in early September.
The poll has a 3.1 per cent sampling error and was conducted between October 11 and October 16.
- BLOOMBERG
