Australia’s retail recovery is fragile because a weakening global outlook is counteracting lower borrowing costs, a Deloitte Access Economics report said.
Inflation-adjusted retail sales growth is forecast to be 3.4 percent in the 12 months through June 30, moderating to 2.7 percent in 2013-14 as real wage growth slows, the Canberra-based research company said in a report released today.
“While retail has recovered fast, the global and Australian economic backdrop suggests that the recovery is still a fragile one,” according to the Deloitte report. “Trend sales growth may be achieved over the next year, largely as interest rates remain low, but it is a stretch to see the retail sector perform any better than that.”
Fueled by A$2 billion ($2.1 billion) in government carbon-tax rebates and benefit checks paid out since May, as well as four central bank rate cuts since November, retail sales have risen in all but one month this year. JB Hi-Fi Ltd., Australia’s second-largest electrical goods retailer, said last month that revenue will increase this year amid a “challenging” environment.