Bloomberg News

South African Retail-Sales Growth Surges to Four-Year High

June 15, 2011

(Updates with economist comment in third paragraph, rand in sixth.)

June 15 (Bloomberg) -- South African retail sales growth unexpectedly accelerated to its fastest pace in almost four years in April, rising 9.8 percent from a year earlier, boosting the recovery in Africa’s biggest economy.

The sales-growth rate increased from a revised 5.3 percent in March, Pretoria-based Statistics South Africa said on its website today. The median estimate of 14 economists surveyed by Bloomberg was 5 percent, with the highest at 6.1 percent. Prices rose an adjusted 2.3 percent in the month.

“This really showed that consumers are willing to spend,” Gina Schoeman, an economist with Absa Bank Ltd., said in an interview from Johannesburg. “Rates remain low, inflation has lifted, but real income growth remains on the up.”

The central bank has left its key rate unchanged at a 30- year low of 5.5 percent, after cutting it three times in 2010, as price pressures picked up and the economic recovery strengthened.

“The accommodative monetary-policy stance of the bank over the past few years has certainly helped to prop up household consumption expenditure,” Daniel Mminele, one of the bank’s deputy governors, said in a May 27 speech in Pretoria.

The rand paired losses after the release of the data. The currency was down 0.6 percent at 6.8039 versus the dollar at 1:52 p.m. in Johannesburg, compared with 6.8189 before.

Borrowing by households and businesses rose an annual 6.2 percent in April, up from 5.1 percent in March, the Pretoria- based Reserve Bank said on May 31.

‘Mixed Signals’

Growth in manufacturing and vehicle car sales slowed, sending “mixed signals” about the strength of the economy’s recovery, Schoeman said.

Manufacturing growth in April unexpectedly eased to 0.4 percent, its slowest pace in four months, from a revised 4.9 percent the month before, Statistics SA said on June 9.

Vehicle sales in South Africa rose at the slowest pace in 17 months in May, the National Association of Automobile Manufacturers of South Africa said on June 2.

“If you look at everything in the economy other than consumption, it remains weak,” Schoeman said. “We’re still expecting the Reserve Bank to only start tightening rates in the first quarter of 2012.”

--Editors: Heather Langan, Digby Lidstone, Karl Maier, Gordon Bell

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


China's Killer Profits
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus