Electric Vehicle Sales Fuel Australia's Resilient Household Spending

Australia's household spending saw a solid increase in June, rising for the second consecutive month. According to data from the Australian Bureau of Statistics (ABS), the monthly household spending indicator (MHSI) increased by 0.8% to A$81.3 billion ($56.92 billion). This growth is attributed to consumers splurging on electric vehicles amid high petrol prices.

The annual pace of spending growth picked up to 6%, reaching a three-month high. In addition, new vehicle sales drove a 3.0% rise in transport spending. Electric vehicle sales significantly increased over the year and continued this trend in June, accounting for an expanding share of overall new vehicles sales.

The Reserve Bank of Australia (RBA) has raised interest rates three times this year to combat inflation, now at 4.35%. Despite higher interest rates cooling the housing market and driving down prices, consumer spending appears to be holding up.