April retail sales shock economists, as VAT hike bites harder than expected

Retail sales growth slowed to 0.5% in April, Statistics SA said on Wednesday.

This is down from 4.6% in March, the month before democratic South Africa’s first ever VAT hike.

The April figure was dramatically weaker than economists expected.

Consumer spending accounts for more than 60% of GDP.

Furniture stores thoroughly bucked the trend, growing sales by 11%.

The Money Show’s Bruce Whitfield interviewed 36ONE Asset Management Portfolio Manager Evan Walker.

Listen to the interview in the audio below (and/or scroll down for quotes from it).

It [VAT increase] doesn’t go away… the petrol price hike was significant… the trend is worsening…

Evan Walker, 36ONE Asset Management

This might stem a rate hike…

Evan Walker, 36ONE Asset Management

We’re not seeing any job creation in the next couple of months…

Evan Walker, 36ONE Asset Management

We’re not going to get close [to 2% economic growth]… I have a very negative outlook for retail sales… We haven’t got more money to spend.

Evan Walker, 36ONE Asset Management

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