September 11, 2009
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News: New Zealand Sees CC Spending Increase
New Zealand who boasts to be "the youngest country on earth," has not gone untouched by the world recession. During the past year they too have felt the devastating effects of a damaged housing market and massive credit card defaults while immersed in one of the worst recessions of the country's history. New Zealand which is also one of the least populated countries in the world, has recently experienced an increase in immigration that has also contributed to an increase in consumer credit card spending. According to New Zealand statistics, credit card spending increased 0.2 percent in August. This is the second consecutive month increase in light of a 0.8 percent increase in July. Spending on fuel and automotive repairs also rose by 0.1 percent.
Although the increase in credit card spending is a modest number, experts predict the recession is nearing the end and consumers should begin to see some economic growth. New Zealand has already begun to see a modest increase in the housing market adding to more consumer confidence. Despite the positive outlook, the current unemployment rate of 6 percent is expected to peak near 7.5 percent by 2010 before the country sees a leveling off. Analysts say that the continued rise in unemployment and the slow growth in credit card spending is an indicator that recovery will be slow. Most likely, New Zealand's Central Bank Governor, Alan Bollard will not be raising interest rates too soon and will not make any changes to the official cash rate.
New Zealand retailers are also optimistic. In a survey conducted by ANZ National Bank Ltd., 43 percent of the respondents predicted sales to increase. Credit card consumers are also feeling more confident. In a poll taken by Roy Morgan Research last week, 42 percent of the 1,025 respondents said they expected the economy to improve during the next year.