Don’t Blame Mining Boom for Little Growth in Consumer Confidence
Reports have indicated the consumer confidence grew little despite the government’s move to cut interest rate. The latest data showed that it only grew 0.3 percent this month.
Some quarters are blaming the mining boom saying this has caused disquiet. Reserve Bank of Australia Governor Glenn Stevens, however, said the mining industry should not be blamed.
He added that households have become more careful in spending and that they are more judicious in saving their money.
Stevens reiterated that the dissatisfaction is not because of the mining boom. He said household behaviors are changing, given the tougher times.
The strong Australian dollar has also been beneficial to Aussie consumers, adding the benefits reaped by the mining industry are felt by the economy.
The RBA Governor added that in the last few years, Aussie households spent more than the usual and now is the time they are spending less and saving more. He predicts that this will end soon.
Stevens tried to placate speculations by saying that it is normal for an economy to post weaker data. He said the Aussie economy will always be a patchwork that will never be seamlessly woven.
He also said that it is rare for all sectors and regions to have the same speed growth at the same time. If that happens, Stevens said that means the economy is either on a recession or experiencing an unsustainable boom.
The RBA Governor said he expects that the country’s terms of trade would remain high, thanks to the demand of Asia for resources.