SOUTH AFRICA’S JUNE RETAIL SALES RISE 2.9 PCT DESPITE TOUGH TIMES
JOHANNESBURG, South African consumers have shown resilience despite the tough economic environment with the latest data released by Statistics South Africa (StatsSA) Wednesday showing that retail trade sales rose by 2.9 per cent year-on-year in June.
Economists had expected an increase of only 2.5 per cent, mainly because of lower statistical base factors. The main contributors to the rise in retail sales were in general dealers and retailers in the food, beverages and tobacco categories.
Economists expect activity in the retail sector to remain muted in 2017 despite slowing inflation and the recent interest rate cut being supportive to consumers. Consumer confidence has been depressed on the back of the difficult environment characterised by low economic growth and high unemployment levels.
Tight lending conditions have also played a role in consumers staying away from the shops.
The main recovery has been driven by easing inflation. Going forward, we expect retail sales to remain firm driven by low inflation the rate of increase will not be strong as consumer confidence remain fragile, said Nedbank economist Johannes Khosa.
He added that the recovery in retail sales would be key in supporting economic growth following a recession. If you look at the quarterly figures they are encouraging. Remember that consumer spending accounts for about 60 per cent of GDP. So that strong retail sales figure suggests that we are likely to see improvement in our GDP numbers.
The economy is expected to record growth of just below 1.0 per cent in 2017.
Source: NAM NEWS NETWORK