-Westpac Banking Corp. (WBC) economists led by Bill Evans
Australian retail sales rose less than economists predicted last month, as weaker spending at department stores offset increased outlays on footwear and clothing. According to the Bureau of Statistics in Sydney, the nation's retail sales climbed 0.2% in April to A$21.9 billion from a month earlier, when they tumbled 0.4%. The result compared with the economists' estimates of a 0.3% gain. The report also showed that retail sales were mostly driven by 0.5% stronger food sales, while a footwear and personal accessory category rose 1.8% from March. On a yearly basis retail sales inched up 3.1%.
The Reserve Bank of Australia slashed its main refinancing rate by 2% over the last 20 months to 2.75%, and during its this month policy meeting the RBA left its core interest rate unchanged, in line with expectations. Australian economy is expected to grow 1.2% this year and 2.3% over the next year, while inflation is likely to remain low and jobless rate to remain low around 5.6% this year and reach 5.5% in 2014. However, the RBA may consider further rate cuts in another attempt to boost economy, as it is facing a difficult transition from growth based on huge investment in the resources sector and softening outlook for a global recovery.
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