ANZ-Observed Spending: Resilience In Travel Offsets Some Moderation

ANZ note that their “observed spending to the 5 February was similar to early 2022 spending despite considerable inflation. But the composition of spending suggests there is still appetite for discretionary purchases. Strong growth in travel spending has been key to offsetting weakness in discretionary goods spending in early 2023.”

• “We expect aggregate spending growth to slow through this year as households deal with cost-of-living pressures and rising rates, particularly when mortgage holders roll off their fixed rates. The bulk of the fixed rate roll off will occur through mid-2023. The release of pent-up demand for travel post COVID restrictions will also fade as more residents enact their travel plans.”