South African retail sales unexpectedly galloped to their highest level in more than two years in October and are excepted to continue to advance, boding well for the economy.
General dealers were the main driver of sales, which climbed 6.3% in October from a year earlier compared with 1.1% in the prior month, Statistics SA said on Wednesday. The median estimate of three economists in a Bloomberg survey was 2%. Sales jumped 1.6% month-on-month.
Retailers could see sales continue to grow, helped by improved sentiment among affluent consumers, lower interest rates, benign inflation and pension reforms allowing savers early access to part of their retirement funds.
The central bank has cut interest rates by 50 basis points since September, lowering the policy benchmark to 7.75%, and inflation is at 2.9%.
“Even though consumer confidence sagged marginally in the fourth quarter 2024, consumers continue to demonstrate an increased willingness to spend,” said Jee-A van der Linde, senior economist at Oxford Economics. “We believe consumers’ spending ability will strengthen further in 2025, but improvements will be gradual.”
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