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Retail sales growth expected to have remained muted

| Economic factors

Retail sales growth in September is expected to have remained muted amid depressed consumer confidence and high unemployment‚ according to Investec economist Kamilla Kaplan.

"Retail sales growth for September is forecast to have lifted to 1.0% year on year (y/y) from 0.2% y/y in August‚ remaining below the average of 2.3% y/y in the year so far.

"The ability and willingness of consumers to spend has been affected by weak growth in real disposable incomes‚ depressed consumer confidence‚ muted rates of credit extension to households and higher taxes and interest rates‚" says Kaplan.

The retail sales data for September is due for release on Wednesday. Also due for release this week is the unemployment report for the third quarter.

"The Quarterly Labour Force Survey for Q3.16 is likely to reflect that the unemployment rate remained elevated at 26.4% compared to 26.6% in the previous quarter‚" says Kaplan.

She adds: "Job creation in the private sector is expected to be weak in line with essentially stagnant economic activity and depressed business confidence. In Q3.16‚ there is scope for government sector employment to have temporarily risen on account of the municipal elections in August."

TMG Digital

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