Retail trade sales in May showed a 0.0% growth year-on-year following the 10% year-on-year increase recorded in April, said Statistics South Africa (Stats SA).
According to Stats SA, in real terms seasonally adjusted retail trade sales decreased by 4.7% in May compared to April 2011. Sales were weaker than what was expected.
“Although April’s high base contributed, May’s figures were much weaker than market consensus forecast of a 7.2% rise,” said Nedbank.
Retail trade sales in real terms for the three months ended May 2011 reflected an increase of 5% compared with the three months ended May 2010. The largest contributor to the increase of 5% were general dealers, followed by retailers in textiles, clothing, footwear and leather goods.
“May’s weaker than expected retail sales numbers suggest that underlying consumer demand is losing some momentum. This, combined with the latest weak production statistics, confirms that economic recovery is still hesitant. Despite rising inflation, we believe the MPC is likely to continue with its wait-and-see policy until there is greater evidence of more generalised inflation,” said Nedbank.
The bank expects the Reserve Bank’s Monetary Policy Committee to keep the repo rate unchanged at 5.5%.
The central bank will make its announcement on interest rates this afternoon. – BuaNews
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