Data from Momentum and Unisa shows that South African households lost R336 billion in wealth over the last year thanks to low growth and high inflation.
Over the last year, South African households got poorer as stagnant economic growth and stubbornly high inflation stoked higher living costs, and inflation ate away any gains.
Total deposits of unincorporated businesses, which may be used as a proxy for net income earned, decreased by R21 billion in current prices compared to a year ago in Q1 2023 – an indication of the strain caused by, among others, load-shedding and rising CPI and interest rates.Momentum-Unisa estimated the value of South African households’ wealth – expressed in current prices – at R16.9 trillion at the end of Q1 2023. This is R393.2 billion higher than at the end of Q4 2022 and R550.
The year-on-year CPI rate was 7.3% in Q1 2023, but household wealth increased by less – only 3.4% compared to Q1 2022.although household wealth was R550.9 billion higher compared to a year ago, when adjusted– meaning they could buy less with their wealth compared to Q1 2022.According to the index, the value of South African household assets increased by R448.3 billion in Q1 2023 to an estimated R19.7 trillion – R741.3 billion more than a year ago.
Additionally, the deposit category benefited from rising interest rates, contributing to an increase in longer than six-month deposits, while one-day to six-month deposits decreased in Q1 2023. “The increase in liabilities in Q1 2023 was dominated by the other debt category, which increased by R41 billion compared to mortgages,” the report said.
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