Introduction
South Africa is currently facing several economic and social challenges which have been crystalised by a number of national and international developments including the war in Ukraine, the COVID-19 pandemic, structural constraints, political and social instability, climate change and a depreciating local currency. Business report (2022) highlighted that headline inflation in South Africa for 2022 has been forecast upward from 4.9% to 5.8%, primarily due to the higher food and fuel prices, triggering a tighter monetary policy and warned South African consumers to brace for even higher prices this year as global supply chain backlogs are showing no signs of easing and are likely to worsen for the rest of 2022. Stats SA figures released on 20 July 2022 have confirmed that the headline consumer inflation surged to a 13-year high of 7.4% in June from 6.5% in May, rising above market expectations of 7.2 %.

Key Macroeconomic Forecasts 2022
The World Economic Forum (WEF) (2022) flagged the prolonged economic stagnation in South Africa as the most serious risk to the country’s recovery over the next two years. The WEF cited this prolonged economic stagnation among the five key risk factors that could affect the country’s stability in the short term with employment and livelihood crises as the second biggest risk factor to the country as the 34.9% unemployment rate in South Africa was the highest in the world. The WEF also said the collapse of State institutions, the failure of public infrastructure, and the proliferation of illicit economic activity were three other concerns for economic recovery. All this could create “social cohesion erosion” as already existing disparities were now expected to widen, risking increased polarization and resentment. Health and economic disruptions were compounding social cleavages when collaboration is fundamental to ensuring a more even and rapid national and global recovery. Taking these aspects into account the BMR probabilistic macroeconomic model, predicts the South African economy to grow by 2.2% and for 2022 to be less favourable year than 2021 in terms of the key macroeconomic indicators presented in the table 1 below.

Trends in Real Retail Trade Sales Growth 2014-2021
Figure 1 presents the annual growth in real retail trade sales in South Africa confirming that the sales have been registering a declining trend during the last seven years from a high of 1.9% in 2014 to a low of -7.1% in 2020 but turning around to a high of 6.4% in 2021 though growing from a very low COVID-19 impacted base.

Real Retail Trade Sales Forecast 2022
After recording one of its deepest contractions (–7.0%) in 2020, South Africa’s real GDP growth bounced back to 4.9% in 2021 – driven primarily by a combination of base effects, strong commodity prices, and the gradual reopening of the economy after strict COVID-19 regulations and mobility restrictions. In terms of the economic outlook for South Africa in 2022, Deloitte Insights (2022) postulates that South Africa needs accelerated structural reforms, infrastructure investment, and fiscal consolidation to realise higher growth in the years to come. By taking into account the prospects of both the 2022 global, regional and local economies, the BMR estimates formal retail sales to grow by 3.0% in real terms during 2022 with the highest growth projected for retail outlets in household furniture, appliances and equipment (8.0%), followed by retailers in textiles, clothing, footwear and leather goods (4.9%), and pharmaceutical and medical goods, cosmetics and toiletries (4.5%) as reflected in figure 2.

Real Household Consumption Expenditure Forecast 2022
Growth in consumption expenditure is normally attributed to two major components, namely, price inflation and an increase in demand. The BMR forecasts household retail expenditure by product group in constant terms, to increase for most of products. Overall, durable goods are anticipated to grow the most by (4.3%) while non-durables and services are likely to expand by (2.7%) and (2.5%) respectively and lastly semi-durables are expected to contract by (-0.1%) as depicted in figure 3.

Figure 4 confirms that in terms of retail outlets, the highest expansion in demand by product during 2022 is expected with respect to recreational and entertainment goods (7.1%) within the durable goods category followed by medical and pharmaceutical products (4.0%) and thirdly furniture and household appliances (3.8%).

Conclusion
The 2022 BMR retail sales forecast shows that retail sales are anticipated to increase by 6.6% in nominal terms and by 3.0% in real terms. This forecast reflects an expansion in sales in terms of volumes for 2022 though from a low base given the impact of the COVID-19 pandemic in 2020 and 2021. The fourth wave of the pandemic was strong but had minimal direct impacts on the global economy. The downside risks to growth and consumption will be a function of other game changers including the Ukraine/Russia conflict, the resultant higher food and oil prices, currency depreciation, the global rising inflation and monetary policy tightening by regional and national central banks plus the persistent supply chain disruptions since the onset of COVID-19.