South African consumers benefited from a stronger rand and moderation in inflation, with spending for January increasing 3.8% year-on-year. (AP Photo/Czarek Sokolowski)
JOHANNESBURG - South African consumers benefited from a stronger rand and moderation in inflation, with spending for January increasing 3.8 percent year-on-year.

A Mastercard SpendingPulse January 2018 report released yesterday said lift in retail sales was the lowest since 2013. Mastercard spokesperson Sarah Quinlan said the sales shadowed the recovery in industries such as agriculture, as production rebounds from the severe drought. Quinlan said pharmaceuticals, medical goods, cosmetics and toiletries, however, underperformed during the period.

But she said the recovery across industries was on the cards. “With 2017’s GDP growth exceeding expectations at 1.3 percent and improved business confidence, we are seeing a healthier economic outlook with a possibility of stronger wage and employment growth in the months to come,” said Quinlan.

MMI Holdings economist Sanisha Packirisamy said consumer spend had likely been buoyed by a boost in confidence since a market-friendly outcome at the ANC National Conference in December last year. Packirisamy said nominal wage growth and an alleviation in inflation pressures, plus real disposable income growth should support consumer spending in upcoming months.

Jason Muscat, senior economic analyst at FNB, said the data and lower inflation supported a probable cut in interest rates later this month.

- BUSINESS REPORT