A new survey has revealed a growing number of Kiwis are likely to cut back on spending over the next three to six months.
The survey, which was carried out by independent economist Tony Alexander found 28 percent of 1135 respondents said they plan to cut back on spending.The result is the largest cut back in spending seen since the survey began in June 2020. In October of this year, 15 percent planned on cutting back on spending.
The latest data is the "weakest on record", but only just, in early July, 27 percent of people planned to cut back on their spending.
Alexander said the drop in consumer spending signals "further pain" for retailers across the motu as the Reserve Bank of New Zealand (RBNZ) battles inflation with high-interest rate hikes.
"Following on from the recent round of interest rate increases there has been a notable deterioration in the net proportion of our over 1000 respondents saying they plan spending more in the near future," Alexander said.
So where are Kiwis likely to spend their cash?
The Spending Plans Survey found three key areas where Kiwis plan on spending and those are groceries, gardening equipment and domestic travel.
Alexander said groceries were expected to make it on the list because of higher prices, while gardening equipment was because of the change in season and domestic travel as we approach the summer months.
"Spending plans for groceries remain very high, though not quite as high as in June as the shock of rising prices seems to have struck hard."
The rise in inflation began in March 2021 jumping from 1.5 percent to 7.3 percent in June of the next year. As a result the RBNZ began increasing the OCR - making borrowing more expensive, in an effort to make Kiwis spend less and lower inflation.
Alexander's data comes after a Trade Me survey found more than half of its respondents plan to cut costs this Christmas.
It found 55 percent of respondents plan to buy second-hand presents because of the rising cost of living, as inflation rises and people's disposable income decreases.
