South Africa’s retail sector recorded stronger-than-expected growth in July, offering a potential indication that household spending and broader economic activity are beginning to improve. Real retail sales increased 3.4% year over year, following a 1.1% rise in June, while seasonally adjusted sales climbed 2.5% from the previous month. Growth was recorded across almost every retail category except hardware, paint, and glass, with general dealers making the largest positive contribution. Lower inflation and reduced fuel prices likely supported household purchasing power. However, rising international oil prices could create renewed pressure. Separately PayInc’s Economic Index rose 0.8% in August, suggesting the economy could return to moderate growth in the third quarter.