South Africa’s retail sales beat expectations in May

Retail sales in South Africa during the month of May jumped, beating market expectations and marking its strongest rise since early 2014 that signaled that the economy may be flipping back to track, after contracting in the first quarter of this year.

Retail sales in Africa's most industrialized economy rose by 4.5 percent year-on-year in May, its strongest rise since early 2014 after expanding by a revised 1.6 percent in April, data released by Statistics South Africa showed Wednesday. Analysts polled by Reuters had forecast a 1.6 percent year-on-year increase in May.

On a month-on-month basis, sales rose by 3.4 percent and were up 3 percent in the three months to May compared with the same period last year. Manufacturing data on Tuesday showed output rose more than expected in May to its strongest level in nearly a year.

"Second quarter 2016 saw commodity prices recover, with tentative signs to date that the industrial sector has pulled out of recession on a stronger performance from manufacturing production," Reuters reported, citing Investec economist Annabel Bishop in a note.

Meanwhile, the economy beset by high and persistent unemployment, has been hobbled by low commodity prices and a severe drought. Overall economic output fell by 1.2 percent in the first quarter of 2016 mainly due to a slide in the mining sector, putting South Africa on course of its first recession in seven years.