World Cup boost for retail sales
19 August 2010
South African retail trade sales received a Fifa World Cup boost in June, rising by 7.4% year-on-year from a revised 4.5% in May, Statistics SA reported on Wednesday.
In May, retail sales jumped by a higher-than-expected 4.5%, supported by World Cup-related spending on items including clothing and electronic goods.
Nedbank economist Johannes Khosa said the effect of the World Cup was also likely to feature in July's retail sales figures.
"Beyond that, sales will remain relatively firm on higher disposable income and lower interest rates, but the growth rate will be contained by a stagnant labour market, sharp increases in administered prices and high household debt levels," Khosa said.
Household furniture, appliances
According to Statistics South Africa (Stats SA), the highest annual growth in June was recorded by retailers in household furniture, appliances and equipment, at 17.7%. This was followed by retailers in textiles, clothing, footwear and leather goods, at 13.1%.
"Retail trade sales in real terms rose by 4.9% in the second quarter of 2010 compared with the second quarter of 2009," Stats SA said.
Interest rates
Commenting on the bearing the data might have on interest rates, Nedbank said it expected rates to remain unchanged until the third quarter of the year.
"The loss in economic momentum over the second quarter and a very strong rand has significantly increased the chance of another interest rate cut at the next [Reserve Bank monetary policy committee] meeting," the bank said.
Source: BuaNews
