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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
October 18, 2024

A View on Demand in the Economy: Retail Sales Performance

In August 2024, South Africa’s retail sales grew by 3.2% annually, exceeding the expected 1.0% increase. This indicates a positive shift in consumer demand, driven by lower inflation and improved economic sentiment. Growth was primarily led by general dealers, which posted a 4.6% rise, contributing 2.1 percentage points to the overall growth, while hardware retailers saw a decline of 4.5%.

Despite the encouraging trend, consumer demand remains somewhat restrained due to tight household budgets and high interest rates. However, a recent rate cut of 25 basis points in September could boost spending and support further growth in the coming months. The full impact of this rate reduction is likely to be seen in retail data from October 2024 onwards.

Overall, while demand is gradually improving, households remain cautious. The combination of improved sentiment and lower inflation may pave the way for stronger economic growth as the year progresses.

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More Coverage

Private Sector Credit Extension (PSCE)

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In September 2025, credit demand increased by 6.0%, slightly surpassing the previous month’s growth yet remaining just below the market expectation of 6.1%. Since the interest rate cuts began in September 2024, overall credit growth has gained momentum, with most subcategories recording increases from July to September 2025.

South Africa’s Economic Crossroads

Reforms, Growth, and the Path to Fiscal Stability
As South Africa prepares for the Medium-Term Budget Policy Statement (MTBPS) on November 12th, 2025, the nation faces a pivotal moment. The government’s ability to fund ambitious initiatives like the National Health Insurance (NHI), the R100 billion transformation fund, and infrastructure revitalisation depends fundamentally on creating a conducive economic environment that stimulates growth and broad-based prosperity.

Consumer Inflation

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In September 2025, the Consumer Price Index (CPI) saw a modest rise to 3.4%, slightly up from 3.3% in August, yet just below the analysts’ forecast of 3.5%.

Unleashing South Africa’s True Potential

A Bold New Blueprint for Sustainable Growth
South Africa’s economic trajectory is at a critical crossroads. After more than a decade of sluggish growth—averaging below 1% annually—the country faces an urgent need for bold, strategic action to unlock its full potential. Despite efforts at structural reform, global rating agencies like Moody’s confirm that current initiatives are insufficient to propel South Africa towards the government’s ambitious target of 3.5% annual growth by 2030. The reality is stark: unless we change course, we risk falling further behind.

Mining Production and Sales

August 2025
In August 2025, mining activity in South Africa declined by 0.2% year-on-year, following a 5.1% increase in July.
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