Retailers have welcomed the Reserve Bank of Australia’s decision to keep the cash rates at 4.35 per cent amid higher costs of doing business.
“Whilst there is no immediate relief in sight, today’s announcement will help keep consumer and business confidence steady,” said Paul Zahra, CEO of the Australian Retailers Association (ARA) said.
“We’ve seen extraordinary resilience from our retail community in recent years. But with ongoing pressure from many directions, many small businesses are struggling to cope.”
Citing ARA and American Express Small Retail Index data, Zahra said that 34 per cent of small business owners chose to work even when sick in the past year due to financial difficulties.
Moreover, 33 per cent of small business owners are taking on more work than they usually do and 30 per cent said they have never felt more stressed as the market challenges take an emotional toll on them.
“We need urgent action to ensure Australia’s $420 billion retail economy not only survives but thrives,” said Zahra.
The National Retail Association (NRA) expressed the same sentiment, noting that a rate hike could leave the industry in a vulnerable position.
“Retailers will breathe a sigh of relief that households won’t lose any further discretionary spending power,” said Lindsay Carroll, interim CEO of the NRA.
“If we’re to see an ongoing revival in consumer confidence we can’t afford any further pressure on household budgets.”
In its monetary policy decision statement, RBA’s board said that momentum in economic activity has been weak, which reflects in the slow GDP growth, an uptick in the unemployment rate, and reports of several businesses being under pressure.
The RBA said that the economic “outlook remains highly uncertain” and the process of returning inflation to the targeted 2 per cent to 3 per cent range “has been slow and bumpy.”
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