| Y-o-y growth in car sales of - 8.2% in
February and corresponding growth of - 10.7% in February light commercial vehicle sales
provide evidence that the slowdown in consumer spending growth witnessed in the fourth
quarter has continued to the present under the weight of high inflation and the impact of
a 4% rise in interest rates last year. February's car sales figures support calls for a
cut in interest rates, especially with inflation beginning to fall sharply and the Rand as
strong as it is. However, the Reserve Bank appears to have painted itself into a corner by
suggesting that it cannot cut interest rates until inflation is much closer to the upper
end of the inflation target, viz. 6%. Therefore, although these latest figures
theoretically should see interest rates coming down soon, this is probably not going to
happen. |
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