They expect the real decline in retail sales to have slowed slightly to around 3% year-on-year in September from the very steep decline of 5.5% in August.
“Economic growth has slowed down considerably, interest rates remain high, household debt is at a record high and inflation is eroding households' spending ability,” said the economists.
Doret Els, an economist at the Efficient Group, paints an even gloomier picture.
Els said: “Retail sales have contracted in five of the eight months to August and we expect September to show an even larger year-on-year decrease of 6.9%. These numbers point to a serious slowdown in consumer expenditure because higher living and debt-servicing costs are demanding a larger chunk of consumers' budgets.
“The increase in fixed expenses has decreased the demand for both durable and luxury goods, as is clearly evident in the sales reported by these retailers. For example, household furniture and equipment sales contracted by an average 2.8% year-on-year for the year to August compared to a 9.6% year-on-year increase in the corresponding period last year.
“We expect sales to experience pressure for quite some time though the consecutive decreases in the fuel price and an easing in general inflation pressures might provide some support to the consumer's wallet,” Els said.
Data from Stats SA is due on Wednesday, 12 November.
The possibility is increasing that the Reserve Bank will soon cut interest rates, said Moody's Economy.com on Friday.
“Should a further raft of negative data be released in the coming weeks, the chances of the Reserve Bank cutting interest rates from 12% at the next monetary policy meeting on December 11 will be significant.
“If the rand gains before then, interest-rate easing could come even sooner,” said the economists.
Source: The Times
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