Sales increased 2.6% from a year earlier compared with a revised 0.4% growth in October, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday. The median estimate of nine economists was for 0.7% growth.
- With consumer confidence still at a two-year low in the fourth quarter, most of the uptick in retail trade were due to the local Black Friday special offers in November. Sales were 3.1% higher than in October, the biggest monthly increase this year.
- The impact of Black Friday trade has been visible in South African retail for the last three years and is gaining in popularity. Since 2017, November has shown the strongest month-on-month sales increase every year. That surge was followed by a monthly contraction in 2017 and 2018 and after South Africa had the deepest power cuts yet in December, the trend may continue.
Nedbank Group Economic Unit said strong retail sales growth is not expected to be sustained in the coming months as household spending will be contained by subdued consumer income growth and a deterioration in consumer confidence.
“Today’s figures will boost fourth quarter growth figures as household spending accounts for about 60% of GDP. However, spending may have been brought forward to take advantage of special offers, and general economic conditions remain subdued,” said the bank unit.
“The MPC will probably keep interest rates unchanged at 6,5% on Thursday mainly due to concerns over the country’s poor and deteriorating fiscal outlook and its implications for Moody’s sovereign risk rating. However, there is a chance of some easing as inflation continued to surprise on the downside, the rand firmed and economic activity remained poor.”
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