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Johannesburg - South Africa’s retail sales grew by 8.3% year-on-year (y/Y) in December at constant prices, compared with an upwardly revised 8% increase in November, Statistics South Africa said on Wednesday.
Stats SA said retail sales grew by 7.7% in the three months to December, compared with the same period a year ago, also at constant prices.
A Reuters poll showed economists expected December retail sales to increase by 7.7% on the same period a year before.
Analysts welcomed the higher than expected growth.
Razia Khan, Africa head of research at Standard Chartered, said the figure was more evidence of robust demand and noteworthy.
“As if any convincing was needed, this is likely to mean no chance at all of further (interest rate) easing. And despite a still benign inflation picture, the emphasis is going to be on when the South African Reserve Bank needs to start tightening.
“South Africans are shopping again, although the weak base also helps," she said.
Mike Schüssler, economist at Economists.co.za, said the figure was very strong.
"I do not think anybody’s expectations were over 8% and that indicates that retailers really had a buoyant Christmas," he said.
“We are going to feel some of those after-effects later, but it says to me that the fourth quarter gross domestic product data will be pretty strong.
“It’s becoming more and more clear that we won’t get interest rate cuts. We are probably now going to have to look at interest rate hikes at some stage.”
The retail sales number has crept up in recent months and surprised on the upside in November, coming in at 7.8% y/y above market expectations of 6.8% as consumer demand picked up.
A pick-up in retail sales should bode well for growth domestic product figures for the last quarter of 2010, due out next week.
Retail sales have previously been a key driver for economic growth, but experienced a slowdown in 2009, during SA's recession.
Stats SA said retail sales grew by 7.7% in the three months to December, compared with the same period a year ago, also at constant prices.
A Reuters poll showed economists expected December retail sales to increase by 7.7% on the same period a year before.
Analysts welcomed the higher than expected growth.
Razia Khan, Africa head of research at Standard Chartered, said the figure was more evidence of robust demand and noteworthy.
“As if any convincing was needed, this is likely to mean no chance at all of further (interest rate) easing. And despite a still benign inflation picture, the emphasis is going to be on when the South African Reserve Bank needs to start tightening.
“South Africans are shopping again, although the weak base also helps," she said.
Mike Schüssler, economist at Economists.co.za, said the figure was very strong.
"I do not think anybody’s expectations were over 8% and that indicates that retailers really had a buoyant Christmas," he said.
“We are going to feel some of those after-effects later, but it says to me that the fourth quarter gross domestic product data will be pretty strong.
“It’s becoming more and more clear that we won’t get interest rate cuts. We are probably now going to have to look at interest rate hikes at some stage.”
The retail sales number has crept up in recent months and surprised on the upside in November, coming in at 7.8% y/y above market expectations of 6.8% as consumer demand picked up.
A pick-up in retail sales should bode well for growth domestic product figures for the last quarter of 2010, due out next week.
Retail sales have previously been a key driver for economic growth, but experienced a slowdown in 2009, during SA's recession.
