oil and gas

South Africa’s consumer finances in Q2 2022 ‘crumble’ amid rising food, fuel prices

August 6, 2022

Steep increases in municipal tariffs pose further risk in Q3 2022, says survey

South African consumers’ finances deteriorated markedly in the second quarter of 2022, according to the latest Momentum-Unisa Consumer Financial Vulnerability Index (CFVI).

The index weakened to 48.5 points in Q2 2022 from 53.4 points in Q1 2022 due to steep rises in fuel and food product prices, load-shedding, higher interest rates and low economic growth, coupled with limited financial resources for consumers.

The expenditure index declined but remained above 50 points. Indices for income, saving and debt servicing decreased to below 50 points, with the latter declining the most.

Steep increases in municipal tariffs pose an additional risk to consumer finances in the third quarter of the year, in addition to current threats, such as higher interest rates, fuel and food prices, and load shedding.

The findings stem from research conducted by BMR at Unisa on behalf of Momentum in July 2022.

However, the outlook for Q3 2022 seems to be bleak, with high levels of consumer financial vulnerability in the short to medium term likely to persist, leading to increasing structural imbalances, downside risks, political and social instabilities, higher poverty and inequality.

This will negatively impact the economy, employment and household incomes, the survey found.


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