GROWTH in retail sales slowed notably to a six-month low in March‚ providing another indication economic growth moderated strongly in the first quarter of this year.
Although Statistics SA will only release the first-quarter gross domestic product (GDP) data on May 27‚ a string of disappointing economic data are already points to a poor performance over the period.
Weak economic growth in the first quarter will mean the remaining three quarters of the year will have to record high economic growth if the Treasury’s forecast for 2.7% growth this year is to be realised.
Households play an important role in retail activity. Rising inflation‚ higher borrowing costs and elevated debt levels are reducing the buying power of their disposable incomes.
Retail sales increased by 1% in March this year compared with March last year after increasing by 2.3% year on year in February‚ Statistics SA figures showed yesterday. Sales were down 1.4% in March after falling by 0.3% in February.
The moderation in sales was mainly due to lower sales among general dealers‚ and food and beverages retailers.
Vunani Securities economist Ilke van Zyl said the retail sales figures were not really surprising given the many factors weighing on South Africa’s household spending.
These included higher interest rates and inflation‚ lower growth in salaries‚ and effects relating to the timing of the Easter holidays this year. – Ntsakisi Maswanganyi