By Lehlohonolo Lehana.
South African retail sales rose 0.8% year on year in May after rising by a revised 0.7% in April, Statistics South Africa figures showed on Wednesday.
Sales fell 0.7% month on month in May after increasing by 0.5% in April.
Economists polled by Reuters predict retail sales will rise 0.7% year on year in May, after a 0.6% increase in April.
Earlier the rand slipped against the dollar in early trade on Wednesday before the release of retail sales figures.
At 06:25 GMT, the rand traded at 18.0725 against the dollar, about 0.2% weaker than its previous close.
On Thursday investor attention will shift to an interest rate announcement by South Africa’s central bank and a speech in parliament by President Cyril Ramaphosa laying out priorities for the new coalition government.
The Reserve Bank started its hiking cycle in November 2021 and has since raised interest rates by a cumulative 475 basis points.
This has brought the country’s repo rate to a 15-year high of 8.25% and the prime lending rate to 11.75%.
The hiking cycle has been paused since May last year, with the Reserve Bank saying it will only cut once inflation has come down sustainably.
The Monetary Policy Committee (MPC) efforts have largely borne fruit, with the latest inflation print from May 2024 coming in at 5.2%.
While this is well within the SARB’s target range of 3% to 6%, Reserve Bank Governor Lesetja Kganyago has said he would like to see inflation anchored around the midpoint of this range, 4.5%. Only then will the SARB consider cutting interest rates.
Ramaphosa’s address meanwhile it is expected to provide an opportunity to outline the key priorities and policies of the seventh administration.
The seventh administration is made up of several political parties that formed a Government of National Unity (GNU) founded on the respect for the Constitution, the Bill of Rights in its entirety, a united South Africa and the rule of law.
With inputs from Reuters.