Retail sales - the main measure of consumer demand - braked from an upwardly revised 7,1% in June and increased by 6,8 in the three months to end-July compared to the same period last year, also at constant prices, Statistics SA said.
"The figure represents a slowdown in household spending and shows that the high interest rate strategy could be having an impact," said ETM economist George Glynos.
"It certainly boosts the argument for leaving rates unchanged, though it doesn’t mean that this is definitely what we will see."
The Reserve Bank has raised interest rates by 300 basis points since June last year in a bid to clamp down on inflationary consumer demand for goods, which has overwhelmed supply.
Growth in manufacturing eased sharply in the second quarter of this year and an independent survey this week showed confidence in that sector also fell significantly in the third period.
The key CPIX inflation gauge has been outside the top end of the bank’s 3 to 6% target for four months in a row and is expected to persist outside the band until the second half of next year.
Yesterday a survey by the independent Bureau for Economic Research (BER) showed confidence in the retail sector dipped in the third quarter of the year, on the higher interest rates and a new credit law, although retailers remained largely upbeat.
Publisher: Business Day
Source: Business day
