The 25% jobless rate has also hurt consumer spending.
Retail sales rose 2.8% from a revised 3.9% in February, Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 16 economists was 2.4%. Sales fell 0.9% in the month.
"It's an early warning signal of the slowdown we expect to happen in the second quarter," Peter Attard Montalto, an economist at Nomura in London, said in an emailed response to questions.
Consumer confidence slumped to a nine-year low and demand for credit fell to the lowest level in about a year in March as inflation hovered near the top of the Reserve Bank's 3% to 6% target.
The Reserve Bank will probably hold the benchmark borrowing rate at 5% next week, according to the median estimate of 10 analysts in a Bloomberg survey. The FNB/BER consumer confidence index dropped to minus seven, the lowest in nine years, in the first quarter.
Today's data gives no reason for the central bank to move out of its "comfort zone" on interest rates, Montalto said.
Yields on benchmark government bonds due December 2026 rose six basis points, or 0.06 percentage point, to 6.85% by 2.03pm in Johannesburg, according to data compiled by Bloomberg. The rand fell 0.7% to R9.3057 against the dollar. – Bloomberg