Wong blames Euro crisis for Aussie household savings
06/06/2012 - Finance minister Penny Wong has acknowledged concerns that economic events overseas are affecting the spending habits of Australian households.
What they see on television and read in newspapers about the financial crisis in Europe is weighing on confidence, she says.
"Households have made a decision to improve their savings," Wong told ABC radio on Wednesday.
"That is not necessarily a bad thing, but obviously it has an effect on the economy."
Wong believes the latest rate cut by the Reserve Bank could boost confidence, especially among borrowers.
The central bank dropped its cash rate by 25 basis points to 3.5 per cent on Tuesday.
The move came ahead of a major economic indicator - GDP data for the March quarter - to be released later on Wednesday.
It is expected to show that Australia's economy grew at below-average pace in the first three months of 2012.
Economists are forecasting the economy grew by 0.6 per cent in the quarter, and 3.3 per cent for the year to date.
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