Households struggling as economy fails to grow

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The South African Reserve Bank (SARB) September Quarterly Bulletin released this week has shown that households are struggling as the economy fails to grow.

The new data shows that consumer disposable income is also under pressure.

The quarterly bulletin consumption expenditure growth in the economy increased to 2.8% quarter-on-quarter.

Household consumption expenditure is likely to moderate to 1.3% in 2019 and then increase to 1.7% next year.

The newly released data from the Reserve Bank shows that real disposable incomes of households moderated noticeably from 2017 – with 2018 posting two quarters of negative growth.

This is adversely affecting spending on durable goods or big ticket items.

Even though incomes improved in 2019, households are struggling and spending remains constrained, as the economy fails to show any signs of real growth.