TASMANIA'S struggling retail sector is the worst in the country, but sales should start to grow in the next 12 months, according to a report released today.
The Deloitte Access Economics retail report says Tasmania is "firmly at the bottom of the state retail leaderboard" with June marking five quarters of negative retail growth.
Deloitte partner David Rumbens said poor retail figures were caused by high unemployment and a generally weak economy.
But he said the falling Australian dollar and low interest rates should encourage employers to take on more staff, which would in turn boost the retail figures.
The report predicts Tasmania will experience a 1.3 per cent growth in retail sales this financial year, as opposed to the 2.4 per cent drop last year.
Australian Bureau of Statistics figures released last week showed Tasmanian retail spending increased marginally in July.
Mr Rumbens said the reintroduction of a majority federal government might also boost business confidence
He said political factors - such as Tasmania's minority government or the forest peace deal - were not considered factors in the poor retail results.
A government spokesman said recovering retail figures, and an 18.8 per cent increase in the number of first home buyers in the 12 months to July, showed the Tasmanian jobs package had a positive impact on the economy.
However, opposition treasury spokesman Peter Gutwein said the report showed Tasmania's economy continued to tank under the Labor-Green government.