Australian consumers are poised to lead the country’s economic recovery through shopping, though retailers will need to compete for their dollars as more opportunities for spending open up.

And, according to Deloitte Access Economics Retail, this outlook relies on Australian consumers spending into their hard-earned savings as fiscal stimulus drops off and income growth remains flat.

“Household budgets in 2020 benefitted from substantial fiscal stimulus, but this tap is being turned off,” said Deloitte Access Economics partner David Rumbens.

“An astonishing 5.5 per cent retail spending growth in 2021-22 is needed to meet budget expectations, despite little offered for household income. Luckily, the war chest of savings built up for many over the past six months is starting to be drawn down, providing some buffer for household spending.

“These savings will play a pivotal role in supporting spending going forward.”

According to Deloitte’s research, retail spending surged 5.9 per cent throughout most of 2020-21 – the highest growth in a decade – though a modest 0.9 per cent increase is likely over the course of 2021-22 due to modest disposable income gains and limited population growth.

NAB chief economist Alan Oster has flagged skepticism whether retail spending will continue to grow at pandemic highs, and warned that consumer spending is increasingly taking a backseat as a driver of growth in the recovery.

However, Rumbens said Australian consumers have already shown they are willing to play their part in the country’s economic recovery.