“Retail trade sales, at constant (2008) prices, for July 2009 reflected a decrease of 3.9% compared with July 2008,” said Stats SA.
Major contributors to the decline were retailers in the hardware, paint and glass sectors as well as general dealers.
Nedbank economist Isaac Matshego told BuaNews that the decline had been much lower than what the market had expected. "It tells us that there's a slower pace of decline in retail sales," he said.
He added that a positive Gross Domestic Product growth was likely to occur in the new year.
Standard Bank senior economist Dr Johan Botha said the economy was still not performing well and that a positive figure was expected towards the end of the year.
"Indications are that the impact of interest rate cuts will be felt by the end of the year, meaning that households will have more in their pockets," he said.
StatsSA also announced that the wholesale trade sales for July 2009 fell by 13.8% year-on-year and that the motor trade sales fell by 12.6% compared with the three months ended July 2008.
“Wholesale trade sales, at constant (2000) prices, for July 2009 decreased by 13.8% compared with July 2008. Wholesale trade sales, at current prices, for the three months ended July 2009 decreased by 16.0% compared with the three months ended July 2008,” said Stats SA.
The data was released on Monday as the South African Reserve Bank's Monetary Policy Committee (MPC) began its two-day meeting to discuss whether interest rates should be cut, increased or kept unchanged.
Both economists did not expect the bank to announce a reduction in the repo rate tomorrow.
"We are not likely to see a cut as negative data continues to come in. However, we may see a half percentage cut in October," said Matshego.
In August, the MPC reduced the repurchase rate by 50 basis points to 7%, to the surprise of economists.
Article published courtesy of BuaNews
