South African retail-sales growth eased to 1.9 percent in April, a six-month low, as slower economic growth and rising unemployment curbed consumer spending.
Sales compared with a revised 2.7 percent in March, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 13 economists was for expansion of 3.5 percent. Sales fell 0.6 percent from a month earlier.
“This makes for pretty gloomy reading, with consumption not doing very much to lift South African growth,” Razia Khan, chief Africa economist at Standard Chartered Plc in London, said in e-mailed comments. “In the three months to end-April, retail sales are up a negligible 2.8 percent. The trend is weak. There is little on which to pin hopes of a sustained recovery.”
The unemployment rate climbed to 25.2 percent in the first quarter from 24.9 percent in the previous three months, as the labor force expanded and the retail, finance and construction industries shed jobs. The economy grew at its slowest pace since a 2009 recession in the first quarter.
South Africa’s central bank has held its benchmark lending rate at 5 percent, the lowest level in more than 30 years, since July to shore up consumer spending, growth and employment in Africa’s largest economy. A slump in the value of the rand is threatening to drive up inflation, limiting the scope for further rate cuts, Governor Gill Marcus said in a speech on June 6.
The rand traded at 10.0160 per dollar at 2:01 p.m. in Johannesburg, down from 9.9643 before the release of the data. It has weakened 15 percent against the dollar this year, the most of 16 major currencies tracked by Bloomberg.
Edcon Holdings Pty Ltd., a retailer owned by Boston-based Bain Capital Partners LLC, and Adcock Ingram Holdings Ltd., the South African maker of Panado painkillers and Corenza cold medicine, said last week that inflation and unemployment in the country will probably weigh on consumer spending.
Ten of the 13 economists surveyed forecast retail sales to rise in April as fewer public holidays compared with a year ago gave businesses more time to trade.