South African retail sales rose by 9,7% year-on-year in July at constant prices, accelerating from the previous month and signalling spending remained robust despite a rate hike, official data showed.
Statistics South Africa also said on Wednesday the annual retail sales increase — the main measure of consumer demand — for June was revised down to 8,7% from 9,1%.
Consumer demand has been the main driver of faster growth in Africa’s biggest economy over the past couple of years, and has so far shown no sign of abating despite a half percentage point hike in interest rates in June.
The central bank raised its key repo rate a further 50 basis points in August and is widely expected to announce a similar hike on Thursday.
In the three months to the end of July, retail sales rose by 9,5% compared to the same period the previous year.
Economists said robust retail spending would add to pressure for higher interest rates, although the impact of the first hikes in rates was still to be felt.
”The numbers are quite strong. They won’t give any comfort for consumers waiting for the Reserve Bank’s decision on interest rates tomorrow [Thursday],” Brait economist Colen Garrow said.
”The central bank won’t be too pleased with numbers like these, and they will give it more ammunition to hike interest rates [further].”
South African Reserve Bank Governor Tito Mboweni warned last week that consumer demand growth, at 8% in the second quarter of 2006, was a major concern.
Domestic markets were little changed after the release of the data, with the rand currency steady at 7,76 to the dollar and yields on the R153 government bond up 1,5 basis points at 8,735%.
The growth in July sales was again driven by general retailers — which includes grocery stores — and retailers of textiles, clothing, footwear and leather goods. -Reuters