Minority Government puts a damper on Australia's retail sectors
Updated
A prominent economic forecaster says that Australia's retail sectors have reason to be optimistic, however, minority government might hinder it from reaching full potential.
Access Economics predicts retail sales to grow by 3.2 per cent this financial year, rising to 3.7 per cent in the year ahead.
A director at Access, David Rumbens, says that retail conditions will be quite solid over the next few years, because of improved jobs market and consumer confidence.
"350,000 jobs created over the past year, consumer confidence is rebounding, stability in interest rates over the past few months I think has helped as well," he said.
However, despite future growth outlook, the retail sector will fail to live up to its potential because of the minority Government's plans to curb population growth.
"Now the reason we got that at times over the past decade is partly because of very strong population growth, but also in large part due to asset price booms, house prices, going up a lot and the share market as well, we're less likely to see those sort of things going forward," added Mr Rumbens.
The current forecast is far from the boom the retail industry enjoyed before the financial crisis, when growth rates were up to 8 per cent.
A pre-crisis boom is not on the cards for retailers given today's weaker population growth, slower house price and share market growth - factors that will hold sales back.
Topics: retail, consumer-finance, economic-trends, international-financial-crisis, federal-government, australia
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