Pretoria - Analysts predict retail trade sales are likely to continue improving in August. Statistics South Africa will release the figures on Wednesday.
Consensus is that retail sales in August will rise to 8.5 percent year-on-year. In July, sales rose to 7.9 percent.
Absa Capital on Monday said it expects sales to have jumped 9.3 percent year-on-year in August, due to improving levels of household debt, credit extension and the uptake in money supply.
"We expect this week's data to sit favourably with the [South African Reserve Bank Monetary Policy Committee] ahead of its next meeting in mid November, showing that South Africa's economic recovery remains on a relatively firm footing.
"We therefore continue to look for interest rates to remain on hold for the remainder of the year and through 2011," said Absa Capital.
Nedbank expects that sales would have eased in August. "Retail sales are likely to have continued to benefit from firm consumer confidence. However, we expect sales to have eased in August following two months of strong growth, which was boosted by the World Cup.
"We forecast the annual growth in retail sales to have moderated to 7.4 percent," Nedbank said it its weekly economic forecast.
Meanwhile, Standard Bank pointed out that the boost to the economy as a result of the World Cup will fade.
"Retail sales have increased by 3.9 percent year-on-year to date, compared with a decline of 3.7 percent year-on-year over the same period in 2009.
The low base from 2009 is likely to keep year-on-year growth elevated for the remainder of the year but there are signs of a real recovery in household expenditure," said the bank.
On a month-on-month basis, sales have been rising in the last five months which is the longest streak of positive month-on-month changes since mid-2006.
"Admittedly, the World Cup buoyed activity over this period, but the recovery in household wealth and disposable income, in addition to the rate cut in September, could limit the expected moderation in expenditure in the second half of the year," said Standard Bank.
In September, the Reserve Bank cut the repo rate by 50 basis points, to 6 percent.
