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South Africa's retail sales grew at the strongest pace in nearly three years in June, bolstered by high consumer spending during the FIFA soccer World Cup. The sales growth was better than forecast.
During June, sales rose 7.4% year-on-year at constant prices, faster than a 4.5% rise in the previous month, Statistics South Africa said Wednesday. Economists were looking for an increase of 7.2%. The increase in June was the strongest since June 2007, when retail sales were up 8.8%.
Retail sales recorded growth for the sixth straight month in June. Analysts see the annual growth as an impact of the 2010 World Cup, when spending by tourists recorded a jump. Sales in May was revised down from a 4.6% rise estimated initially. At current prices, sales rose 9.1% annually, compared to a 6.2% increase in May.
On a monthly basis, retail sales rose a seasonally adjusted 1.8% at constant prices in June. During the quarter ending June, sales rose 1.2% from the previous three months. During the January to June period, sales increased 3.1% compared to the same period last year.
Separately, the statistical agency reported that the country's wholesale trade sales increased 2.6% year-on-year at constant prices in June and rose 9.7% at current prices. Month-on-month, the wholesale sales declined 0.7% at constant prices and 1.3% at current prices. For the first six months of the year, wholesale sales at constant prices slipped 0.5% over a year ago.
Last month, the Organization For Economic Co-operation and Development said that the South African economy may grow 3.3% this year and accelerate to 5% next year. The economy contracted 1.8% last year. In the first quarter of this year, the economy grew 4.6% quarter-on-quarter, following a 3.2% expansion in the fourth quarter of 2009.
Supporting the view that the June growth was fueled by an increase in consumer spending by tourists was the steep rise in jobless rate, which could hamper domestic spending. In the second quarter, the unemployment rate rose to 25.3% from 25.2% in the first quarter. Jobless rate was 1.7 percentage points higher than a year earlier.
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