Deloitte highlights South Africa’s dismal savings rate and how it compares to other emerging markets.
South Africa’s savings rate is at a shocking level compared to its emerging market peers, sitting at a dismal 0.5% in 2023.
The rate is calculated as the difference between a nation’s income and consumption divided by income. It is an indicator of a nation’s health as it shows trends in savings, which lead to investments. This eventually was highlighted by several prominent South African banks in their latest annual financial reports, which all noted concern about the increase in credit impairments as inflationary pressures continue to erode South Africans’ disposable income.
In light of dire economic strain on average South Africans and an undesired turn to relying on credit for everyday living expenses, Capitec CEO Gerrie Fourie said the bank had limited its credit facilities – making over 900 changes to its credit policies, purely because of the risk the bank sees with people turning to credit currently.
In addition, trade tensions between the United States and China will likely impact South Africa in the year ahead, as South Africa’s prominent exporting sectors are particularly vulnerable to these tensions.
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