9 Nov 2010

Electronic card spending up for second month

2:03 pm on 9 November 2010

Spending using electronic cards rose strongly in October for the second consecutive month, new figures show.

But economists say the increase in the goods and services tax in October is masking how much of the rise is related to demand from consumers.

Statistics New Zealand says electronic card transactions rose 0.9%

during the month.

That follows a 1.1% increase in September, ahead of the GST increase form 12.5% to 15%.

A economist at Goldman Sachs, Philip Borkin, says it is difficult to discern how much of October's increase comes from higher prices being passed on to shoppers and how much was actual new spending.

Mr Borkin says some retailers will not have passed on the GST increase because of the weak economy.