Rising inflation and higher lending rates are said to have contributed to South Africa's weakening economy which saw retail sales grow at a slower rate in January, as demonstrated by newly released data.
Capital Economics analyst John Ashbourne said to Reuters: “While the weakness was widespread, it was most pronounced in durable goods, suggesting that consumer confidence is slipping.”
According to the government figures the economy is growing at 0.9 percent in 2016. But some analysts are expecting growth of about 0.5 percent.
Many analysts expects Africa’s most industrialised economy to narrowly avoid a recession. Analysts said consumers were shifting their spending to smaller goods such as cellphones, purchased at smaller all-purpose stores. Africa’s largest grocer Shoprite, considered a barometer of lower-tier spending, posted an 8.9 percent rise in half-year profit in February, as cash-strapped consumers increasingly turned to cheaper, no-frills retailers.
