Money SA economy
Retail trade sales fell below market expectation to 4.6 percent year-on-year in August, Statistics South Africa (Stats SA) says.
Consensus was that sales in August would rise to 8.5 percent year-on-year compared to the revised 8% year-on-year in July.
Nedbank economist Isaac Matshego said the number reflected a loss of momentum following the World Cup boost during the previous two months.
According to Stats SA, retail trade sales in real terms rose by 6.7 percent in the three months ending August 2010, compared with the three months ending August 2009. The main contributors it said were general dealers, retailers in textiles, clothing, footwear and leather goods as well as those in household furniture.
"These numbers confirm that the domestic demand recovery remains fragile. However, above-inflation wage increases, particularly in the public sector, low interest rates and subdued inflation will provide some support to retail sales over the coming months," said Matshego.
He added that though interest rates are expected to remain flat until 2012, chances for a rate cut have been boosted by the weak sales and manufacturing production as well as the strong rand.
Standard Bank said: "The low base from 2009 is likely to keep year-on-year growth elevated for the remainder of the year but there are signs of a real recovery in household expenditure."
It pointed out that the boost to the economy as a result of the World Cup will fade. - BuaNews
