Sept retail sales up 6.1 percent
South Africa’s retail sales growth quickened to 6.1 percent year-on-year in September at constant prices. |||
September retail sales at 6.1 percent year on year
South Africa’s retail sales growth quickened to 6.1 percent year-on-year in September at constant prices, compared with a 4.6 increase in August, Statistics South Africa said on Wednesday.
Stats S.A said retail sales grew by 6.2 percent in the three months to September, compared with the same period a year ago, also at constant prices. A Reuters poll on Monday showed economists expected September retail sales would be at 4.7 percent year-on-year.
ANALYST COMMENT SALOMI ODENDAAL, ECONOMIST, CITADEL
“Consumers’ ability to spend is improving with the lower interest rates and real wage increases for those people that are employed.
“So we can expect consumer spending to increase going forward although we don’t see any huge consumer spending boom in the shorter term. The trend is definitely recovering from the recession we had in retail sales and we think the gradual recovery will continue.
“There is still a strong possibility the Reserve Bank will cut interest rates by 50 basis points tomorrow.”
MARKET REACTION
The rand was trading at 7.0358 against the dollar at 11:50 SA time, from 7.0540 before the data was released at 11:30 SA time. The yield on the benchmark 2015 government bond increased slightly to 7.11 percent from 7.105 percent beforehand.
BACKGROUND
– Retail sales surprised on the downside at 4.6 percent year-on-year in August and analysts said it showed real weakness in consumer demand.
– But some analysts say the consumer recovery is on track, given an improvement in disposable incomes of those employed.
– A survey on Tuesday however showed South Africa’s consumer confidence slipped in the fourth quarter, as unemployment worries weighed on sentiment and spending.
-The market has priced in a 60 percent chance of a 50 basis point cut in interest rates when the Monetary Policy meets to decide on rates on Thursday.
-That would bring total reductions to 650 basis points since December 2008, as the central bank tries to boost sluggish economic growth. – Reuters
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