11 Oct 2010

Spending jumped ahead of GST rise

1:55 pm on 11 October 2010

Retail spending has jumped, as people left it to the last minute to beat the rise in GST that took effect this month.

Electronic retail card sales rose a seasonally adjusted 1.5% in September, the first increase in three months, Statistics New Zealand figures show.

Retail sales have been lacklustre in recent months as a slowing economy led households to curb their spending plans.

Economists had expected a spike in spending in the lead-up to the increase in GST to 15% at the beginning of the month, but consumers left it late.

Excluding volatile car and fuel sales, core spending rose 1.4%, led by durable items like furniture and appliances, which enjoyed its biggest monthly increase in more than two years.

Spending on food and alcohol also rose strongly.

Despite the jump in spending, economists say the rise is moderate by historical standards, as people concentrate on repaying debt.