Sat Oct 22 00:04:55 SAST 2016

Retail sales to suffer - economists

By unknown | Apr 14, 2009 | COMMENTS [ 0 ]

Lihle Z Mtshali

Lihle Z Mtshali

Retail sales figures for January may have shown a surprising 1.7percent growth but economists expect a decline when Stats SA releases February's data tomorrow.

January's growth was the first in nine-months and economists were quick to warn that it could just be a fleeting rise as job cuts would continue to weigh on consumers' minds.

Standard Bank economists reiterated that point last week, saying: "...Lower inflation and interest rates may lift consumer sentiment, but this may still be weighed by job concerns."

They forecast a growth rate of -2.5percent year on year for February.

Efficient Group economist Fanie Joubert said he also expected weakness in the data.

"Luxury items will still be worst hit, followed by household appliances, specialised foods and retail hardware," said Joubert.

"The big question now is 'how long will general retailers hold up their resilience?'"

Big retailers, which make up about 40percent of the retail basket, have shown resilience in recent months.

February's weaker retail stats, coupled with last week's negative data, are expected to pave the way for an interest rate cut on April 30 when Reserve Bank governor Tito Mboweni announces the Monetary Policy Committee's decision.

"After the flurry of negative data on the state of the domestic economy, there is little doubt that the economy sunk into a technical recession in the first quarter of the year," said Standard Bank.

"We maintain that the Bank is likely to ease rates by a further 2.5 percentage points this year, with emphasis on swift action over the next two months."


Login OR Join up TO COMMENT