Consumers’ financial pain rises in Q2
A small number of consumers earned the bulk of the income and were responsible for most spending, saving and debt servicing in the economy.
South African consumers were alarmed in recent weeks when they noticed there had been a dramatic increase in food prices. Picture: iStock
The state of South African consumers’ personal finances deteriorated during the second quarter of this year following a gradual improvement since the second quarter of last year, according to the Momentum-Unisa Consumer Financial Vulnerability Index (CFVI), which decreased to 45.9 points from 49.7 points in Q1 2021.
“Higher levels of financial vulnerability in Q2 2021 were caused, among others, by the Covid social relief grant which ended in March this year, pressures of rising fuel and food prices, high unemployment and limited salary increases,” said Momentum economist Johann van Tonder.
“The drivers which led to the lower CFVI score were the significant decline in consumers’ abilities to save and limited employment opportunities, which were exacerbated by below-inflation salary increases and absence of social relief grants, making it difficult for consumers to live within their means in the past three months.”
He noted that a small number of consumers earned the bulk of the income and were responsible for most spending, saving and debt servicing in the economy.
Main reasons for changes in the four sub-index scores were:
- Income vulnerability increased during the second quarter of this year;
- Higher levels of expenditure vulnerability;
- Savings vulnerability also increased; and
- Consumers were more vulnerable in terms of debt servicing capabilities.
