South African households are under pressure, Nedbank says.
South African households are under pressure, say economists at Nedbank, with the country’s economy starting off 2023 on the back foot.
Meanwhile, the Reserve Bank’s Quarterly Bulletin shows that real personal disposable income declined by 0.2% qoq in Q3 2022, Nedbank said – a reversal of fortunes following three consecutive quarters of growth.“After drawing down their savings over the previous three quarters, households opted to rebuild their financial buffers, lifting the savings rate slightly to 0.5% of PDI. The uptick in savings suggests that households have become more cautious, expecting economic prospects to weaken.
Debt service costs consumed 7.5% of disposable income in Q3, after creeping up to 7.1% in Q2 from 6.9% at the start of last year. Households’ net wealth position also deteriorated further, falling to 332.2% of PDI in Q3 from 338.7% in Q2, reflecting the drop in equity prices and stagnating house prices.The stresses for households and consumers reflect in the wider economy, the bank said.
There was more bad news on the consumer front, with retail sales contracting – the main drag coming from lower sales of hardware, paint and glass, as well as pharmaceuticals. Higher sales Looking into the first few weeks of 2023, Nedbank said that manufacturing production and new vehicle sales data will give an indication of how the country will be kicking things off for the new year.
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