Pretoria - Retail trade sales eased to 3.9% in January from 8.7% in December, Statistics South Africa (Stats SA) said on Wednesday.
Seasonally adjusted sales decreased by 0.6% in January compared with December 2011 and in the three months to January sales increased by 6.9% year-on-year.
Experts expected it to come in at 6.5%.
"Growth in retail sales will remain softer during the year as the support from low interest rates and high income will be contained by moderate high inflation, particularly administered prices, higher debt levels and tighter access to credit," said Nedbank ecnonomists.
"The much weaker than expected retail sales number suggest that consumer spending is losing some momentum, which does not bode well for already fragile economic growth. Despite inflation being above the upper end of the target range, the weaker growth environment is likely to prompt the MPC to keep interest rates unchanged until around November," the bank added.
Despite the data, Standard Bank economists expect the Reserve Bank to keep the repo rate unchanged at 5.5%.
"Today's retail sales print does not alter our view that the SARB is likely to keep interest rates unchanged at 5.5% throughout 2012. The SARB remains wedded to its inflation target, and with the recent announcement of lower electricity tariffs than previously priced in is expected to shave at least 0.1% points off overall CPI and an envisaged entry into the target band earlier than anticipated, we could see interest rates remain flat for some time," it said.
Last week, the National Energy Regulator of SA announced a 16% tariff increase for power utility Eskom down from the original 25.9%.
