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Johannesburg - Growth in South Africa’s retail sales quickened to 2.2% year-on-year (y/y) at constant prices in June from an upwardly revised 0.2% in May, Statistics South Africa said on Wednesday.
Stats SA said retail sales grew by 4.1% in the three months to June, compared with the same period a year ago, also at constant prices.
Economists polled by Reuters last week expected retail sales to rise by 1.5% y/y in June.
Colen Garrow, economist at Brait, said a bit of a bounce was expected but the trend is still a weaker one.
"Overall it is going to weigh on GDP (gross domestic product) by the end of the year and good reason as well. The consumption side of the economy is battling under the weight of a number of price adjustments, electricity, administered prices, food inflation, the toll road tariff pending, so I think there is still enough weight for the retail sales figures to weaken by the end of the year, so I think the trend is still weaker.”
Retail sales - previously a key driver of economic growth - have gradually risen after a contraction during 2009, but y/y expansion has been muted in the last two releases as South African consumers remain heavily indebted.
About a million jobs were lost during the recession and unemployment currently stands close to 26%, a factor expected to constrain robust growth in retail sales.
Markets now expect the Reserve Bank to hold off raising interest rates to the middle of next year, and money markets are even pricing in the small chance of a rate cut this year.
Stats SA said retail sales grew by 4.1% in the three months to June, compared with the same period a year ago, also at constant prices.
Economists polled by Reuters last week expected retail sales to rise by 1.5% y/y in June.
Colen Garrow, economist at Brait, said a bit of a bounce was expected but the trend is still a weaker one.
"Overall it is going to weigh on GDP (gross domestic product) by the end of the year and good reason as well. The consumption side of the economy is battling under the weight of a number of price adjustments, electricity, administered prices, food inflation, the toll road tariff pending, so I think there is still enough weight for the retail sales figures to weaken by the end of the year, so I think the trend is still weaker.”
Retail sales - previously a key driver of economic growth - have gradually risen after a contraction during 2009, but y/y expansion has been muted in the last two releases as South African consumers remain heavily indebted.
About a million jobs were lost during the recession and unemployment currently stands close to 26%, a factor expected to constrain robust growth in retail sales.
Markets now expect the Reserve Bank to hold off raising interest rates to the middle of next year, and money markets are even pricing in the small chance of a rate cut this year.
