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Johannesburg - Growth in South Africa’s retail sales were flat in May at 0.0% compared to a year ago, from an upwardly revised 10.0% rise in April, Statistics South Africa said on Wednesday.
Stats SA said retail sales grew by 5.0% in the three months to May compared with the same period a year ago, also at constant prices.
Economists polled by Reuters last week expected retail sales growth to slow to 7.2% year-on-year.
“That’s not a good number. If you look at the inflation number we just had ... inflation is rising and now after that this number is telling us that consumers are blowing hot and cold," said Freddie Mitchell, economist at Efficient Group.
“After the credit numbers next week we should have a picture of the overall demand story in the economy, but this figure shows that consumers are a bit wary of spending. Our view is that we will see at least one rate hike towards the end of the year.”
The retail sales year-on-year number has crept up in recent months as consumer demand improves and credit demand, though still weak, showed households finances are slowly improving.
The high level of job losses since a recession in 2009 is expected to constrain robust growth in retail sales.
The Reserve Bank said in its annual report last month it expects the recovery to be self-sustaining. The Bank is expected to keep interest rates unchanged at 5.5% this week.
At its May policy meeting the bank said positive momentum observed in the past few quarters in household consumption growth appeared to have been sustained.
Retail sales have previously been a key driver for economic growth, but fell sharply in 2009, during the country’s first recession in nearly two decades.
Stats SA said retail sales grew by 5.0% in the three months to May compared with the same period a year ago, also at constant prices.
Economists polled by Reuters last week expected retail sales growth to slow to 7.2% year-on-year.
“That’s not a good number. If you look at the inflation number we just had ... inflation is rising and now after that this number is telling us that consumers are blowing hot and cold," said Freddie Mitchell, economist at Efficient Group.
“After the credit numbers next week we should have a picture of the overall demand story in the economy, but this figure shows that consumers are a bit wary of spending. Our view is that we will see at least one rate hike towards the end of the year.”
The retail sales year-on-year number has crept up in recent months as consumer demand improves and credit demand, though still weak, showed households finances are slowly improving.
The high level of job losses since a recession in 2009 is expected to constrain robust growth in retail sales.
The Reserve Bank said in its annual report last month it expects the recovery to be self-sustaining. The Bank is expected to keep interest rates unchanged at 5.5% this week.
At its May policy meeting the bank said positive momentum observed in the past few quarters in household consumption growth appeared to have been sustained.
Retail sales have previously been a key driver for economic growth, but fell sharply in 2009, during the country’s first recession in nearly two decades.
