In the Governor's words:
"This is no doubt a difficult environment for retailers. From a macroeconomic point of view, perhaps on balance it is not entirely unwelcome in the current circumstances. The reason I say that is that, if consumption were to boom at the same time as we try to expand the resources sector, upgrade urban infrastructure and increase our pace of housing construction to house a growing population, it would be harder to avoid the economy overheating. The more cautious behaviour by households is also, I think, building some resilience into household balance sheets, and that will be a good thing to have in the future should developments at some point turn in an unfavourable direction.
The ratio of household debt to income seems to have stopped rising, having been going up for about 20 years. That is happening in a number of countries. It is not just here, so the factors behind it are not just local ones. But we have in this country the good fortune to be seeing this desire to have consolidation in household finances happening at a time when our incomes are going up because of the terms of trade story. That is an advantage that many other countries do not have."
- Posted using BlogPress from my iPad
