Debit, credit card spending falls

Tuesday 10th March 2009

New Zealand consumer spending on debit and credit cards fell last month, excluding the surge in petrol prices, underlining the effects of prolonged recession on the retail sector.

The value of transactions at retailers excluding fuel and auto-related outlets fell 0.4% in February, according to Statistics New Zealand. Total transactions at retailers rose 0.5% as the price of petrol rose.

The Reserve Bank is expected to cut the official cash rate by 50 basis points to a record low 3% on Thursday to revive a contracting economy with dissipating inflation. The NZSE Consumer Index has declined 42% in the past 12 months, with Pumpkin Patch, Postie Plus Group and Michael Hill International all sliding more than 40%.

The card spending data comes three days before the government releases retail sales for January, with economists expecting sales growth to stall. The February report is not due until April.

By Jonathan Underhill

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