Consumers 'key to beating downturn'

Australian consumers hold the key to emerging from the downturn, one expert has claimed.

In an interview with Bloomberg, Roger Corbett, board member of the Reserve Bank, explained that it was thanks to Australians spending on debit cards and credit cards, among other means, that helped the country avoid recession.

The government’s efforts to boost expenditure by distributing over $20 billion to households, which may have enabled them to pay off low interest home loans, also helped the country avoid recession, he remarked.

Looking forward, Mr Corbett said consumers will be fundamental in helping the economy.

He commented: "How consumer demand holds up in light of no consumer stimulus [will be] one of the determining factors in how quickly our economy in Australia recovers."

Furthermore, he added there will almost certainly be an upturn in the country’s finances, meaning interest rates will rise.

Earlier this month, the Reserve Bank of Australia decided to keep the interest rate at three per cent, which is the lowest it has been in nearly 50 years.

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