Gross domestic product (GDP) for the first quarter of the year will probably be worse than that of the fourth quarter of last year, Metropolitan Asset Managers said on Wednesday.

This would confirm that the country was in a recession, economist at Metropolitan Asset Managers Jaanre Fourie said.

Fourie was reacting to retail sales figures released earlier by Statistics South Africa (Stats SA).

The Pretoria-based agency said that retail trade sales worsened even further to -5,3% year-on-year in March at constant prices from February's revised -4,4%.

Total retail sales for the first quarter of the year were down by 2,9% compared to the same period a year ago, Stats SA added.

Three of the categories posted double-digit declines.

Retailers in food and beverages in specialised stores declined to -10,8% year-on-year, while the category for retailers in household furniture and appliances went down to -10,1% year-on-year.

Even though retailers in hardware, paint and glass posted the lowest growth rate at -14,1% year-on-year, it was still an improvement from its dismal performance in February of -20,2%.

Retailers in textiles and clothing posted a significant decline from -2,3% year-on-year in February to -9,6% in March.

"These weak numbers are a clear indication that the slowdown in retail is not only limited to durable goods, but is becoming more widespread in the retail sector," Fourie said.

This did not bode well for economic growth for the rest of the year as household spending contributed a significant portion (more than 60%) of total GDP.

According to Fourie, the GDP figure for the first quarter of 2009 would be worse then the previous quarter, confirming that the country was in a recession.

Another concern was that inflation remained elevated at retail level.

Retail inflation, measured simply as the difference between retail sales at current and constant prices, increased from 11,5% in February to 11,9% year-on-year in March.

"This is much higher than CPI at 8,5% year-on-year," Fourie noted.

The highest inflation rates were recorded in retailers in pharmaceutical and medical products (15,6% year-on-year) and retailers in food and beverages in specialised stores (14,5% year-on-year).