
In October, retail sales in South Africa saw an unexpected boost, reaching their highest point in over two years, with forecasts suggesting further growth on the horizon, signaling optimistic trends for the economy.
The increase in sales was primarily driven by general dealers, who reported a 6.3% rise in October compared to the same month last year, a significant jump from the previous month’s 1.1%, as reported by Statistics SA on Wednesday. The median prediction from three economists participating in a Bloomberg survey was set at 2%. On a month-to-month basis, sales increased by 1.6%.
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Retailers might continue to see an upward trend in sales, buoyed by improving consumer sentiment among affluent individuals, falling interest rates, stable inflation, and pension reforms that grant savers earlier access to some of their retirement funds.
Since September, the central bank has lowered interest rates by 50 basis points, reducing the policy benchmark to 7.75%, with current inflation at 2.9%.
“While consumer confidence dipped slightly in the fourth quarter of 2024, there is still a marked increase in consumers’ willingness to spend,” noted Jee-A van der Linde, senior economist at Oxford Economics. “We expect consumers’ purchasing power to gradually strengthen in 2025.”
© 2024 Bloomberg L.P.
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