Coronavirus driven panic buying pushes Australian retail sales 0.4% up in February

The Australian Bureau of Statistics (ABS) released its monthly report on retail sales on Wednesday. The data suggested an increase in Australian retail sales in February which, according to analysts, was attribute to Coronavirus pandemic that fueled panic buying among the Australian consumers at the grocery stores.

The ABS revealed a 0.4% increase in Australian retail sales in February on Wednesday. In January, retail sales had posted a 0.3% decline instead. The Bureau also said on Wednesday that the upbeat figure for Australian retail sales was largely attributed to food retailing that currently makes up 40% of overall retail trade in Australia.

Grocers Like Coles And Woolworth Posted Significant Increase In Sales In February

Multiple governments resorted to travel bans and recommending its citizens to avoid social gatherings in an attempt to minimize the fast transmission of the flu-like virus. The pandemic also fueled fears that essential items are likely to run out of stock at grocers like Coles and Woolworth. Subsequently, panic buying contributed the most to an increase in monthly retail sales.

The broader indicator of consumer confidence, discretionary spending, on the other hand, remained under pressure driven largely by the declines in clothing, personal accessory, footwear, luxury goods retailers, and duty-free stores in February.

Economist Josh Williamson of Citi Group commented on Wednesday’s data and stated:

“Since retail trade only accounts for about 30% of total household consumption, front-loading purchases is unlikely to offset lower spending elsewhere. Therefore, we still expect a negative Q1 GDP print.”

Coronavirus Threatens To Break Australia’s Run Of 3 Consecutive Decades Of Economic Growth

Amidst the Coronavirus pandemic, economists are also anticipating an end to Australia’s glorious run of 3 consecutive decades of economic growth. The Australian economy is currently valued at just over £1 trillion.

According to Australia and New Zealand Banking Group (ANZ), the Australian economy is likely to drop by 2% in 2020’s second quarter. It also forecasts a massive 1.9% contraction in Australia’s GDP on a year over year basis in December 2020.

The forex market responded aggressively to the economic data on Wednesday. The Aussie dollar posted a massive drop from 0.60257 in the morning session to as low as 0.57013 later in the day against the greenback. Part of the loss, however, was later reported to have been recovered with the pair last seen trading around 0.57715. Wednesday’s level marked a multiyear low for AUD/USD in the forex market.