On an annual basis, retail trade sales fell 0.8% in July, Statistics South Africa (Stats SA) said on Wednesday. At first glance, the year-on-year number may not look that bad until one considers the sector’s ailing state of affairs in July 2020. Or the fact that in June year-on-year growth was 10.5%, 15.5% in May, and 95.1% in April.
“Few would have expected a contraction in year-on-year terms, given that the base in 2020 was still impacted by some lockdown restrictions and a severe wave of Covid in the winter months,” Razia Khan, Chief Africa Economist at Standard Chartered Bank in London, told Business Maverick.
Standard Chartered expected a slowdown in growth to 3.5%, so the number fell way below expectations, highlighting the impact of the July unrest in KwaZulu-Natal and Gauteng that killed more than 350 people.
Sales of household furniture, appliances and equipment comprised the biggest decliner among sub-sectors, falling 10.2% year-on-year.
In the three months to the end of July, Stats SA said retail trade sales decreased on a seasonally adjusted basis 2.9% compared with the preceding three months. This was the first decline on this front since June last year, probably the most wretched three-month period that the retail sector has ever faced.
July 2021 was that bad, largely because of the mayhem and madness unleashed after the jailing of former president Jacob Zuma for his sneering contempt of the apex court.
Among other things, the data seal the case for the South African Reserve Bank to hold interest rates steady next week when its Monetary Policy Committee meets. It is also likely to lead to further downward revisions in South Africa’s economic growth forecasts for 2021. With unemployment on the rise along with tensions in the governing ANC, there is plenty of fuel out there to stoke the next social explosion. This economy can ill afford another battering on that scale. DM/BM