Increased debit card use is surprising

Australia's latest gross domestic product (GDP) figures showed that people have not been as tight with their money as many economists thought.

The nation's economy expanded by 1.3 per cent in the first quarter of 2012 and the upturn took a lot of experts by surprise.

It had been widely assumed that the fragile economic climate and high cost of living had forced Aussies to maintain a tighter grip on their debit cards. However, the GDP statistics appear to tell a different story.

Speaking to City AM, Nomura economist Martin Whetton said that growth was not as far below trend as the Reserve Bank of Australia had originally predicted.

"While the rise in private investment was expected, the strength in household spending was surprising, partly driven by a strong increase in expenditure on food," he was quoted as saying.

Things certainly seem to be looking up for Aussie households and recent interest rate cuts could also help people free up some more disposable income in the coming months.

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