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Standard Bank Group
The SA Daily 13 November 2019

Growth set on still weak

  • Although SA’s current financial conditions are now significantly better than during the 2008/9 financial crisis, financial conditions weakened in 3Q19. Therefore, real GDP growth likely weakened in 3Q19, from 3.1% q/q growth in 2Q19.
  • There is co-movement between retail sales growth and financial conditions (as measured by the Standard Bank Financial Conditions Index). In 2009, when financial conditions deteriorated to an average of -2.1), retail sales contracted 3.3% y/y and real GDP growth contracted 1.5% y/y.
  • In September, retail trade sales likely increased by 1.7% y/y (consensus: 1.9% y/y), from 1.1% y/y in August. Consumer purchasing power was likely boosted then by still benign inflation, the 25 bps interest rate cut in July, as well as financial conditions in September at least holding steady. The retail sales data is due out later today.

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