South Africa Retail Sales Growth Slows as Spending Wanes
Sales rose 1.9 percent from a year earlier, down from a revised 2.2 percent pace in December, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 12 economists was 3.6 percent. Sales declined 1.2 percent in the month in data that was rebased to 2012 from 2008.
“Households seem to be putting a break on spending,” Thabi Leoka, head of macro research at Standard Bank Group Ltd., said in a phone interview. “We expect uninspiring growth in the first half of the year.”
The unemployment rate of 25 percent is the highest of 39 emerging markets monitored by Bloomberg. The economy will probably expand 2.7 percent this year from 2.5 percent in 2012, Finance Minister Pravin Gordhan said last month. That’s less than half the 7 percent pace the government says is needed to meet its target to reduce joblessness to 14 percent by 2020.
Gross domestic demand, which includes consumers, government and investments, contracted for the first time since 2009 in the fourth quarter, dropping an annualized 0.9 percent, the Reserve Bank said yesterday. Growth in consumer spending, which makes up about two-thirds of expenditure in the economy, slowed to an annualized 2.4 percent last quarter from 2.7 percent in the prior three months.
The central bank has kept its benchmark interest rate at 5 percent since a surprise cut in July, concerned that a weaker rand will push the inflation rate above its 3 percent to 6 percent target range.
The rand extended its decline after today’s data, dropping 0.3 percent to 9.1978 per dollar at 1:13 p.m. in Johannesburg. The yield on the rand debt due in 2021 was little changed at 6.51 percent.
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