Christmas sales will be “reasonable” this year, but well short of boom conditions, according to Access Economics.

The forecaster says that, in effect, Australia’s shopkeepers had their Christmas early this year.

The economists said that happened back in March, when the Federal government posted out thousands of $900 cheques, as part of its first stimulus package.

“and retail sales spiked up as a result,” the economists said.

That, of course, was precisely what the government wanted, at the time.

But more recent spending has been far more modest, Access said.

The economists pointed out that, even in nominal terms, retail sales rose by just 0.6 per cent in the three months to the end of October.

However consumer confidence remains very strong, Access said.

It said two key indicators of wealth, the share market and house prices, had also rebounded strongly, after the global economic crisis.

These developments would usually be accompanied by strong borrowing, as Australians became willing to spend more.

“Yet we are seeing some consumer caution on this front,” the forecaster said.

“The stock of personal debt remains 9.5 per cent lower than a year ago.

“Consumers have used their interest rate windfalls to pay off some debt,” Access said.

The forecaster is predicting that real sales, in Australia’s shops, will rise by just 2.1 per cent in the 2009-2010 financial year.