South African households remain under economic pressure, impacting their spending power
A Reuters analysis of a varied basket of goods shows how the COVID-19 crisis has upturned a decades-old consumer model for everything from clothing to food.. The slower growth in real disposable income underlines this trend.
Household debt in South Africa continues to rise despite the easing economic environment in recent months. According to data from the Reserve Bank, household debt as a percentage of nominal disposable income edged higher to 62.2% in the third quarter of 2024. “So, we see that there’s still an advancement of loans to the households, although it’s slowing down. The main categories where we see that loans are slowing down are your secured loans and your mortgages that are slowing down. Whereas when you look at credit cards, overdrafts, and those instalments – that’s where we see that the high increases because those are unsecured loans are quite easy to access.
Manamela outlines the outlook from the central bank. “We have always seen that for the rest of 2024, the household debt has been slowing down as banks are using quite strict criteria to lend out, and as a result the banks are only left with what you call creditworthiness clients and basically they are running away from. That’s why you see that. So, in terms of the quantity of loans that has been decreasing as well.