With today’s new base in place, we could well be looking at annual retail growth toward 5.5% being registered by mid next year. The Reserve Bank, though, might be more inclined to pay attention to the deflation story in retail land, and the way it reflects in the CPI, not so much the demand force it tells of. If so, it will make it hard for the Bank to lift the OCR further anytime soon. It’s reminiscent of the previous economic upswing (2002-07). Only that, now, there is not the global inflation around.
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