Retail sales decreased in February, Statistics South Africa said on Wednesday.
Sales dipped an annual 4,5% compared with a revised 1,2% gain in January, the Pretoria-based agency said.
February’s decrease came in spite of rate cuts by the South African Reserve Bank to encourage consumer spending.
”Rate cuts may have added an initial boost but as confidence has deteriorated and as workers have been retrenched, this downward trend is likely to continue,” said Nedbank economist Carmen Altenkirch.
She added that it would probably take close to a year for rate cuts to make some difference to the retail sector.
”People who get extra income from rate cuts are choosing to pay off their debts rather than spend,” she said.
”This happens particularly in an environment where employment prospects aren’t looking great,” she added.
Altenkirch said that it was not wise to put too much emphasis on one month of data — referring to January’s retail sales that showed a gain.
”It’s best to study the data over a couple of months and wait for a trend to develop either way,” she added. — Sapa