Johannesburg - Retail sales marginally improved in June on a year-on-year basis, but grew slower than they did in March, which included the Easter period, figures from Statistics SA showed on Wednesday.
Actual growth was 1.7 percent, compared to 4.5 percent in March, while the consensus was for a year-on-year gain of 3.6 percent.
In a note, Investec said the growth rates continue to be somewhat erratic, and often subject to revision.
It added the 51c a litre cut in the petrol price from August 2015 to June 2016 provides a small petrol price savings dividend, which consumers likely spent, in the main. However, this savings dividend waned over the second quarter.
Investec adds this savings dividend will drop further in July, eroding the support to retail sales from this source in that month.
However, it says a 99 c a litre petrol price cut occurred in August, and a 61c a litre is currently building for September, which will likely give sales in coming months some support, but also contribute to the volatility in the retail sales growth figures.
Read also: SA's March retail sales slow
Industrial production rebounded substantially in the second quarter as manufacturing and mining production lifted notably, with commodity prices recovering. The economy will likely avoid recession in the first half of this year, but only record growth of 0.2 percent year-on-year for the year as a whole, Investec predicts.
The economy shrunk 1.2 percent in the first quarter of the year and the second quarter figures are due on September 6.
Investec adds the local currency’s recent strength is unlikely to translate into widespread price reductions, but would be expected to assist in dampening inflation. Retail price inflation is currently 6.2 percent year-on-year, above its long-term average of 4.5 percent year-on-year.
IOL