Discretionary spending power set to be hit by North African unrest

The discretionary spending powers of everyday Australian consumers could be hit further still by events happening thousands of miles away.

While the political unrest in North Africa may seem unrelated to Australia's domestic economy, observers have warned that the prospect of a civil war in Libya, combined with an ongoing sense of uncertainty across the region as a whole, could hit Aussies in the pocket.

More specifically, the Herald Sun newspaper has warned that the unrest has already sent the cost of a barrel of oil soaring, with this set to be felt at garage forecourts in Australia over the coming days.

Commenting on the way the rise in oil prices impacts upon Australians, CommSec economist Savanth Sebastian said simply: "It affects discretionary as people will be paying more for petrol."

Meanwhile, Australian insurers are bracing themselves for a raft of claims following the New Zealand earthquake, prompting fears that customers may be asked to dip into their savings accounts to pay for rising policy costs.

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