South Africa’s retail sales hit a two-year low as they soar to the lowest level
In October, South African retail sales unexpectedly surged to their highest level in over two years, with expectations for continued growth, offering positive prospects for the economy.
General dealers were the primary contributors to this sales increase, which rose by 6.3% in October compared to a year earlier, up from 1.1% the previous month, according to Statistics SA’s Wednesday report. The median forecast from three economists in a Bloomberg survey stood at 2%. Month-on-month, sales grew by 1.6%.
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Retailers may continue to experience sales growth, supported by enhancing consumer sentiment among wealthier individuals, decreasing interest rates, steady inflation, and pension reforms allowing savers earlier access to portions of their retirement funds.
The central bank has reduced interest rates by 50 basis points since September, bringing the policy benchmark down to 7.75%, with inflation currently at 2.9%.
“Although consumer confidence slipped slightly in the fourth quarter of 2024, there is still a noticeable increase in consumers’ readiness to spend,” stated Jee-A van der Linde, senior economist at Oxford Economics. “We anticipate that consumers’ spending power will further strengthen in 2025, albeit gradually.”
© 2024 Bloomberg L.P.
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