Recent transactional data shows how consumer spending took a hard knock from the Covid third wave and stricter lockdown, as well as the unrest from the rioting and looting that occurred during the month.
These two events have dented the country’s economic recovery in a short time.
BankservAfrica’s card and point-of-sale transactional data measured consumer spending from the lockdown levels during the June to July period, as well as the riots in KwaZulu-Natal and Gauteng during July. It also compared the spend over this period against the 2020 and 2019 figures.
“The massive dips observed in our consumer spending data in July 2021 are worrying, especially when compared against the previous months where the economy was making good headway against the 2020 slowdown,” said BankservAfrica’s Shergeran Naidoo.
“During the main week of looting, the volume of card and ATM cash withdrawals declined from about 4.5 million transactions per day to about 4.3 million.”
However, noted Naidoo, this was slightly alleviated by panic buying in the two provinces.
Mike Schussler, chief economist at economists.co.za, said the consumer spending impact from the lockdown level 4 and the riots was “quite substantial”.
“One can expect this to show a negative impact on June 2021 and, particularly, July 2021 economic data,” said Schussler.
“The estimated 9% transaction decline over 15 days could be equal to about a 5% decline for July for consumption expenditure.”
Due to the Sassa grant payment dates and the looting … the average number of transactions equalled 3.35 million for the 15 days to 24 July compared to the 3.69 million transactions for the same 15 days to 24 June.
“The impact was therefore a 9% drop on the comparable 15 days in July 2021,” Naidoo said.