South African Retail Sales Growth Slows on Unemployment
Sales rose 1 percent from a year earlier, down from a revised 6.7 percent in March, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 11 economists was 4.1 percent. Sales rose 1.5 percent in the month. Spending was higher in April 2011 because there were more public holidays last year, the agency said.
“This is going to put very serious downward pressure on growth,” Johannes Khosa, an economist at Nedbank Group Ltd. (NED), said in a telephone interview. “If it continues to weaken, it will increase pressure” on the Reserve Bank to lower the benchmark rate.
The central bank has kept the repurchase rate at 5.5 percent for a record 18 months to shore up a recovery from a recession in 2009 that is under threat from the debt crisis in Europe. Economic growth slowed to an annualized 2.7 percent in the first quarter, from 3.2 percent in the previous three months.
The rand dropped 0.2 percent to 8.413 per dollar at 1:18 p.m. in Johannesburg, erasing gains after the data was released. The yield on the rand debt due in 2015 dropped six basis points, or 0.06 percentage point, to 6.19 percent.
Investors are boosting bets policy makers will cut the benchmark rate this year. The yield on the forward-rate agreements due in December declined 6 basis points today to 5.29 percent, the lowest since November.
Growth in retail sales, the fastest expanding part of the economy last year, slowed in the first quarter. Mining slumped for a 10th month in April and manufacturing shrunk in March.
The number of people employed in Africa’s largest economy fell 75,000 to 13.42 million in the first quarter, lifting the unemployment rate to 25.2 percent, the highest in almost a year. Inflation was 6.1 percent in April, exceeding the central bank’s maximum 6 percent target range for the fifth time in six months.
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