But the key sector is still hampered by higher interest rates, Statistics SA data showed yesterday.

Retail sales activity — which accounts for 14% of the economy — fell 0,5% in December and 0,2 the previous month, fanning fears the sector may slip into a recession early this year.

“While the marginal increase in January’s retail sales exceeds our expectation of a real contraction, the outlook for this sector this year does not look optimistic,” Efficient Group economist Doret Els said.