South African Retail-Sales Growth Beats Estimate in May

(Bloomberg) -- South African retail-sales growth beat expectations for a second straight month in May, boding well for an economy that contracted in the first quarter.

Retail sales rose 2.2% from a year earlier compared with a revised increase of 2.7% in April, Pretoria-based Statistics South Africa said in a report on its website. The median estimate of 11 economists in a Bloomberg survey was 1.7%.

Key Insights

• Retail-sales growth may get a boost from the central bank on Thursday as it’s forecast to reduce interest rates for the first time in more than a year. Households spent 9.3% of their disposable income on interest payments on debt in the first quarter and a lower key rate would increase their spending power.
• Household consumption expenditure, which accounts for almost 60% of gross domestic product, shrank 0.8% in the first quarter, contributing to the economy’s 3.2% annualized contraction.

--With assistance from Amogelang Mbatha, Renee Bonorchis, Gordon Bell and Simbarashe Gumbo.

To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net

To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, Jacqueline Mackenzie

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