JOHANNESBURG - South Africa’s retail sales figures for June surprised on the downside further raising the possibility of the economy has entered a technical recession last quarter.
Data released on Wednesday by Statistics South Africa showed that retail sales growth slowed from 1.9 percent year on year in May to 0.7 percent in June. This was much weaker than the 2.2 percent market consensus.
Wednesday’s retail figures echoed the data from the manufacturing sector, where falls in output also moderated. The mining sector was the only key industry to post growth in the second quarter.
The economy contracted the most in nine years in the first three months of the year, tanking 2.2 percent on the back poor mining and manufacturing output figures.
“This is a very poor result for the economy – many analysts had predicted that growth would rebound following the contraction recorded in the first quarter,” said John Ashbourne, an Africa economist at Capital Economics.
“This raises the serious risk that South Africa suffered a technical recession in the second quarter.”
- BUSINESS REPORT