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The SA Daily 16 January 2019

November retail sales likely moderated

Shireen Darmalingam

  • November retail sales data is due out later today, providing the latest colour on the SA consumer — and ahead of the South African Reserve Bank’s (SARB) rates decision tomorrow.
  • November retail sales growth likely moderated to 2.0% y/y, from 2.2% y/y in October. The data isn’t likely to fully factor in the surprise repo hike of November last year — but we nonetheless expect that sales were supported by subdued inflation and the usual festive-season spending, including November’s Black Friday deals.
  • The SARB will likely take into account consumers being constrained, and therefore opt to keep the repo flat tomorrow — at 6.75%. We also expect the repo to remain there this year.
  • We see a relatively low exchange rate pass-through to prices, which would help keep inflation contained within the 3% - 6% target range in 2019.

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