Spending on credit cards in New Zealand rose at its fastest monthly pace in almost a year as the Rugby World Cup hit its stride, prompting punters to charge more on the plastic.
Total billings in New Zealand climbed 2.6 percent to $2.62 billion in October, the fastest monthly pace since December last year, according to Reserve Bank data. Total billings rose 7.9 percent compared to the same month a year earlier, the biggest annual gain since February 2008.
Domestic billings on New Zealand cards rose 2.8 percent to $2.3 billion, while local spending on foreign cards was $319 million in October, compared to $289 million in September.
“This confirms we have got a bit of stimulus from the Rugby World Cup,” said Cameron Bagrie, chief economist at ANZ New Zealand. “The issue is what the hangover is likely to be, and how much is going to be given back in November.”
Government data for spending on electronic cards showed a pick-up from the sporting tournament, and third-quarter retail spending volumes grew faster than expected amid the inflow of tourists arriving in New Zealand for the Rugby World Cup.
“Imagine if we hadn’t had the Rugby World Cup, things would’ve been pretty poor,” Bagrie said.
Bagrie said New Zealand’s economy was better-placed than other nations, as households use record low interest rates to repay debt and improve their savings and strong commodity prices underpin nationwide earnings growth. Still, any global downturn will hinder the nation’s economic recovery.
“It’s coming together in really grumpy growth,” he said. “We’re holding up well but, it’s scratchy.”
Total advances outstanding on New Zealand credit cards rose 0.4 percent to $5.46 billion, the most since February this year.
Overseas spending on New Zealand cards rose 2 percent to $303 million in October.
(BusinessDesk)
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1 Comments
"Bagrie said New Zealand’s economy was better-placed than other nations, as households use record low interest rates to repay debt and improve their savings and strong commodity prices underpin nationwide earnings growth"
Thanks for that stunningly inaccurate inferral that households are using record low interest rates to repay debt Bargie. It would appear blatently obvious to most that households have infact spent up large on their credit cards, in essence doing the exact opposite of repaying debt and improving their savings.
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