Retail sales beat the street for second straight month

By Rene Vollgraaff

(Bloomberg) – South African retail-sales growth beat expectations for a second straight month in May, boding well for an economy that contracted in the first quarter.

Retail sales rose 2.2% from a year earlier compared with a revised increase of 2.7% in April, Pretoria-based Statistics South Africa said in a report on its website. The median estimate of 11 economists in a Bloomberg survey was 1.7%.

Key insights

  • Retail-sales growth may get a boost from the central bank on Thursday as it’s forecast to reduce interest rates for the first time in more than a year. Households spent 9.3% of their disposable income on interest payments on debt in the first quarter and a lower key rate would increase their spending power.
  • Household consumption expenditure, which accounts for almost 60% of gross domestic product, shrank 0.8% in the first quarter, contributing to the economy’s 3.2% annualised contraction.