Supplementary Budget 2020

Household consumption expenditure gathers pace

(iStock)
(iStock)

Pretoria - South Africa’s household consumption expenditure growth is projected to reach 2.3% in 2019, according to National Treasury’s medium-term budget.

“A moderate recovery in household consumption growth from 2017 should support domestic demand in food and beverages, motor vehicles, furniture and appliances,” said Treasury.

“Continued global demand is expected for motor vehicles, with exports of finished units set to grow by over 10% this year and next."

Household consumption expenditure is among the growth areas in South Africa’s economy.

The mini budget highlighted that a crippling drought has resulted in an 8.3% contraction in the agriculture, forestry and fishing sector in the first half of 2016. Mining production was down 8.3% in the first half of 2016, compared with the same period in 2015.

Metal products and motor vehicles contracted by 3.6% and 0.5% respectively.

Manufacturing contributed 0.2% to gross value added in the first half of 2016 while petrochemicals, wood and paper, and food and beverages each respectively posted growth rates of 6.5%, 5.3% and 0.9%.

The financial sector grew by 2.2% during the first half of 2016 compared with the same period in 2015.

Amid this mixed performance, there is still weaker jobs growth in South Africa.

“In the 12 months to June 2016, employment fell by 112 000,” said Treasury.

“In the context of an unfavourable economic and investment climate, the unemployment rate rose from 25% to 26.6%.

"According to the June 2016 Quarterly Employment Statistics, all sectors apart from construction shed jobs in the second quarter of 2016. A return to employment growth requires higher economic growth and renewed private-sector investment,” said Treasury.

* Visit our Budget Special for all the budget news and in-depth analysis.

ZAR/USD
16.72
(+0.29)
ZAR/GBP
21.01
(+0.48)
ZAR/EUR
19.07
(+0.04)
ZAR/AUD
11.67
(-0.03)
ZAR/JPY
0.16
(+0.46)
Gold
1809.01
(+0.39)
Silver
19.23
(+0.66)
Platinum
827.48
(+0.14)
Brent Crude
42.17
(-1.20)
Palladium
1967.50
(+0.38)
All Share
55531.05
(-1.19)
Top 40
51235.09
(-1.23)
Financial 15
10528.08
(-1.64)
Industrial 25
75515.64
(-1.81)
Resource 10
53219.66
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 2071 votes
I am taking a hit, but should be able to recover in the next year
23% - 2676 votes
My finances have been devastated
35% - 4041 votes
It's still too early to know what the full effect will be
25% - 2894 votes
Vote