SA October retail sales fall, demand still weak
South Africa’s retail sales recorded a steeper than expected fall in the year to October, pointing to continued pressure on consumers despite the economy crawling out of recession, data showed on Wednesday.
Africa’s biggest economy grew by an annualised 0,9% in the third quarter of this year after three consecutive quarters of contraction, but demand is still depressed after nearly one million jobs were lost, while previous interest-rate increases still weigh.
Statistics South Africa said retail sales fell by 6,5% year-on-year in October at constant prices, compared with a revised 4,9% decline in September.
Economists polled by Reuters had forecast a 6,2% year-on-year fall in retail sales for October.
“It’s clear retail sales are still under pressure because households are still struggling with huge debt burden and the labour market is difficult,” said Citadel economist Salomi Odendaal.
The Reserve Bank cut rates by 500 basis points between December 2008 and August to help the struggling economy, unwinding increases in the two years to June 2008 aimed at taming inflation. The bank has, however, left rates steady at its last three policy meetings.
“The lower interest rates should assist in time.
Statistics South Africa said retail sales decreased by 5,9% in the three months to October, compared with the same period a year ago, also at constant prices.—Reuters
