Retail spending on eating out and social activities that Australians have favoured following lockdowns and restrictions is likely to continue growing, with a top economist predicting a record year.
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The latest retail forecasts report from Deloitte Access Economics' David Rumbens says Canberra is likely to record a bumper year in 2020-21, with 9.1 per cent retail growth up from less than 1 per cent over the pandemic year.
"Spending options have been limited, and with many households having cash to burn, consumers flocked to retail," Mr Rumbens said.
"This has supported what is likely to be the strongest gain in retail spending in a decade."
Once those savings are gone, however, there will be some pullback next year, Mr Rumbens said.
The longer-term retail forecast for the ACT is among the strongest across Australia, with the territory expected to be sitting on top by the end of the five-year period with 2.9 per cent growth in 2024-25 and a five-year average of 2.8 per cent.
"The ACT may not be the fastest every year, but it'll be amongst the fastest growing states - that's just based on expectations around employment growth, and quite strong income growth associated with that," Mr Rumbens said.
The Deloitte report says the strong outlook for spending relies on households drawing on war chests of savings as stimulus measures unwind and income growth remains muted.
Mr Rumbens said Australians could see lockdowns were still a go-to policy measure, and were also aware the nation's vaccine rollout is lagging significantly behind other countries. That would impact consumer confidence when it came to spending those savings war chests, he said.
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The other key driver of retail spending is population growth. The government predicts Australia's population in June 2025 will be half a million lower than pre-pandemic predictions.
Australia not being in a position to reopen the international borders to tourists and migrants would also impact retail growth.
"We have basically two years of very little population growth locked in," Mr Rumbens said.
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