Consumer spending will increase in long term states RBA

Consumer spending on low-rate credit cards will increase in the long term, but the Reserve Bank of Australia (RBA) is unsure when the economy will bounce back.

Governor of the bank, Glenn Stevens, addressed a crowd of financial experts at the Anika Foundation Luncheon and claimed: "We could then reasonably expect to see consumption record more growth than it has in the past few years.

"After all, it is very unusual for real consumption per person not to grow."

He added, however, that economists cannot predict exactly when growth might return, and said that the recovery would depend on a plethora of other economic issues.

Mr Stevens also noted that the rapid rise in savings interest rates was a good sign and the pace of growth in this area has outstripped the interest rate decline during the global economic downturn.

At the end of last week, the Commonwealth Bank of Australia claimed that the RBA would delay any adjustments to interest rates to encourage domestic demand.

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