ECONOMIC WEEK AHEAD: Retail and mining sector figures for August to remain subdued
Fuel hikes and tax increases pile pressure on consumers amid global uncertainty
Poor economic and trading conditions have dragged down performances in the retail and mining sectors, two major industries whose August 2018 data will be released this week. Together with manufacturing, these sectors are an important dipstick for economic productivity in SA. Consumption constitutes about 60% of GDP, but declines in household spending have shrunk consumption, mainly as hefty fuel price hikes pushed petrol prices up 25% in the past seven months. The average household income is also expected to remain under pressure in coming months as the effects of April’s one-percentage-point VAT increase as well as other tax hikes continue to filter through. An upwards creep in inflation also continues to restrain expenditure. Economists are not expecting good news for August and most are forecasting a contraction. NKC African Economics chief economist Elize Kruger expected -0.5% for August this year compared with July's year-on-year growth rate of 1.3%, a sign of consumer strain. ...
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