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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): December 2025

In December 2025, the demand for credit grew by 8.7%, slightly surpassing the market’s expectation of 8.0% for the month. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories experiencing increases, especially following the South African Reserve Bank’s decision to lower interest rates.

South African Gold and Foreign Exchange Reserves for January 2026

The South African international liquidity position, measured by net gold and foreign exchange reserves, strengthened in January 2026 in both US dollar and rand terms.

South Africa and the Extension of AGOA: Navigating Challenges and Opportunities

In an unexpected twist amidst strained diplomatic relations, U.S. President Donald Trump has extended the African Growth and Opportunity Act (AGOA) for one year, a decision that carries significant implications for South Africa’s economy.

Interest Rates Hold Steady: A Balanced Approach from the SARB’s MPC

In a keenly anticipated meeting on January 29, 2026, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) announced its decision to maintain the repo rate at 6.75% and the prime lending rate at 10.25%.

Producer Price Inflation – December 2025

In December 2025, producer price inflation remained stable at 2.9%, consistent with the figure recorded in October.
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