Shoppers remain cautious

Kea' Modimoeng

Kea' Modimoeng

Statistics South Africa yesterday announced a continual decline in retail trade sales - with trading taking place at last year's prices.

In March there was a decrease of 5,3percent compared to the same month last year, from a revised decrease of 4,4percent in February.

The statistics confirm that South Africa should be in an official recession when the first quarter gross domestic product data is released on May 26.

When compared quarter on quarter, the retail trade sales, at constant 2008 prices, for the first quarter of 2009 reflected a decrease of 2,9percent compared with the first quarter of last year.

But retail sales are expected to improve gradually this year due to a combination of interest rate cuts, in line with declining inflation.

Chris Hart, an economist with Investment Solutions, said the results reflect that the economy is going through a tough time.

He said the current economic situation "supports the argument for further interest rate cuts".

This, he speculated, would take place in May, June, and August.