Retail sales in South Africa increased in November as consumer sentiment improved

Retail sales in South Africa surged in November as consumers took advantage of the interest rate reductions from the previous year, falling inflation, and a pension reform that let fund members to take partial withdrawals before to retirement.

Statistics Data from South Africa revealed on Wednesday that retail sales increased 7.7% year over year (ZARET=ECI) in November, which was faster than the experts’ forecasted 5.5% growth and the revised 6.2% gain from October.

In a month when sales are usually boosted by Black Friday shopping, clothing shops and marketers of appliances and furnishings were the greatest contributors.

According to Elna Moolman, head of macroeconomic research at Standard Bank, statistics indicated that the “two-pot” pension reform’s distributions peaked in the second half of October, giving customers greater disposable income in November.

“We remain constructive about the outlook for consumers, which we assume will be supported by persistently low inflation and further interest rate relief from the Reserve Bank,” Moolman stated. 

Although the December annual inflation rate (ZACPIY=ECI) opened the week little higher at 3.0%, it is still close to the bottom of the South African Reserve Bank’s target range, and analysts anticipate another 25 basis point rate decrease the following week.