SYDNEY, Aug 4 (Reuters) - Australian household spending rose strongly for a second month in June as consumers splashed out on electric vehicles amid high petrol prices, data showed on Tuesday, suggesting demand was holding up in the face of rising borrowing costs.
Data from the Australian Bureau of Statistics showed its monthly household spending indicator (MHSI) rose 0.8% in June to A$81.3 billion ($56.92 billion). Analysts had generally looked for an increase of 0.2%, following a 1.2% jump in May.
The annual pace of spending growth picked up to 6% in June, hitting a three-month high. Spending for the whole June quarter rose 0.7% in real terms to A$227.8 billion.
"New Vehicle sales were the standout within transport this month, driving a 3.0% rise" said Tom Lay, ABS head of business statistics.
"Electric vehicle sales increased significantly over the year and have continued that trend in June, accounting for a growing share of overall new vehicles sales as households adjust their spending behaviour in response to rising fuel prices."
The Reserve Bank of Australia has raised interest rates three times this year to 4.35% to fight inflation, fully reversing the amount of policy easing made in 2025. It also warned policy tightening might not be over as higher energy prices fed through the economy.
The higher interest rates are cooling the housing market, driving down prices and weighing on sales - one key reason markets are not fully pricing in another RBA rate hike this year. The central bank is also monitoring how falling house prices could curb consumer spending through the so-called wealth effect.
Tuesday's data also showed air travel spending returned to levels seen before disruptions from the Middle East conflict began in March, while the volume of fuel spending rose 7.8% in June as consumers stocked up on cheaper fuel.
Recreation and culture rose 1.4% in June, helped by spending on electronic goods, live entertainment and gambling activities supported by major sporting events, the ABS said.
($1 = 1.4284 Australian dollars)
(Reporting by Stella Qiu and Wayne Cole; Editing by Christopher Cushing and Shri Navaratnam)
