Latest news with #QuarterlyBulletin
IOL News
11 hours ago
- Business
- IOL News
SA households drowning in debt, but repayments got a little easier
Discover how the latest SARB report reveals the state of South African household debt and the surprising improvements in financial health, despite rising debt levels Image: Pixabay The South African Reserve Bank (SARB) took a close look at the country's economy and found household debt is now almost two-thirds of what people earn, simply because debts are growing faster than income. But there's some good news from SARB's latest report: the amount you spend on paying off debt, compared to disposable income went down. This is, partially, thanks to a small interest rate cut of 0.25 percentage points in January. SARB also pointed out, in its Thursday release of the Quarterly Bulletin, that the average household's overall financial health improved early in 2025. This is because the value of what people own grew more than what they owe. Specifically, rising stock prices and increasing house values helped boost people's savings and assets. The bulletin also details the performance of various sub sectors in terms of real gross value added (GVA) – which measures GDP without inflationary effects. In terms of economic sectors, that agriculture was a shining star, mining remains in the doldrums, manufacturing continues to decline, while retail, motor trade as well as tourism and accommodation subsectors gained during the first quarter. In addition to subdued demand from the electricity-intensive mining and manufacturing sectors, electricity generation was constrained by breakdowns at several of Eskom's generation units, resulting in the renewed implementation of electricity load-shedding. The contraction in the real output of the construction sector reflected lower civil construction and residential building activity. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The tertiary sector – which includes all kinds of services like banking, shops, transport, personal care, education, and healthcare – grew a bit faster in early 2025. SARB reported that shops, car sales, tourism, and hotels saw improvements, but wholesale trade decreased. SARB also said that 'the expansion in the transport, storage and communication services sector was underpinned by increased activity in land freight and air transport as well as transport support services'. The finance, property, and business services sector also grew slightly in the first quarter of 2025, thanks to more activity in insurance, pension funds, and other financial support services. However, government services and personal services (like hairdressers or gyms) continued to shrink. IOL
IOL News
15 hours ago
- Business
- IOL News
South African households face uphill battle as finances remain strained
According to the Quarterly Bulletin released by the South African Reserve Bank (Sarb) on Thursday, growth in real gross domestic expenditure (GDE) eased to 0.4% in the first quarter of 2025 following an increase of 0.2% in the fourth quarter of 2024. Image: Ayanda Ndamane/ Independent Newspapers. Household finances in South Africa are expected to remain strained on the back of accelerating unemployment rate and rising debt levels, resulting in slow expenditure trends. According to the Quarterly Bulletin released by the South African Reserve Bank (Sarb) on Thursday, growth in real gross domestic expenditure (GDE) eased to 0.4% in the first quarter of 2025 following an increase of 0.2% in the fourth quarter of 2024. Real final consumption expenditure by households increased at a slower pace in the first quarter of 2025 but nevertheless contributed most to growth in real GDP. By contrast, real final consumption expenditure by the general government and gross fixed capital formation contracted further, alongside a further deaccumulation of real inventory holdings, albeit at a slower pace. 'Growth in real final consumption expenditure by households moderated notably in the first quarter of 2025, along with the slower pace of increase in the real disposable income of households and a sharp decline in consumer confidence,' said the Sarb. 'Real spending on durable and non-durable goods increased at a slower pace, while that on semi-durable goods remained unchanged and growth in real outlays on services accelerated.' This comes as the Consumer Confidence Index rebounded from the significant drop in the first quarter of 2025 from -20 to -10 in the second quarter. This was predominantly due to the resolution or improvement in earlier concerns including the reversal of the value-added tax (VAT) increase, lower stages of loadshedding, improved relations between the United States and South Africa, and the Government of National Unity (GNU) partners' commitment to working together. Momentum Investments chief economist, Sanisha Packirisamy, maintained a positive view on the consumer outlook despite the headwinds facing consumers. Packirisamy said this outlook was supported by the rebound in CCI following the sentiment shock in the first quarter. 'The rise in the unemployment rate in the first quarter, potential fuel price increases following the temporary spike in Brent crude oil prices due to the Israel-Iran conflict, and floods could weigh on consumer sentiment. However, reduced load shedding, a continuation in two-pot withdrawals, lower interest rates and a stable GNU, if it persists, could support consumer confidence,' she said. 'We forecast household consumption expenditure to grow by 1.8% in 2025. As the largest component of GDP, accounting for 67.7% in the first quarter, household consumption is central to our growth outlook and forms the cornerstone of our 1.2% GDP growth projection for 2025.' Meanwhile, the Sarb said household debt as a percentage of nominal disposable income increased from 62.2% in the fourth quarter of 2024 to 62.7% in the first quarter of 2025 as household debt increased more than nominal disposable income. Households' cost of servicing debt relative to disposable income edged slightly lower over the same period, reflecting lower interest payments following the further 25 basis point reduction in the prime lending rate in January 2025. Households' net wealth increased in the first quarter of 2025 as the market value of total assets increased more than that of total liabilities. The value of assets was boosted by a notable increase in domestic share prices as the FTSE/JSE All-Share Index outperformed share price indices in developed markets in the first quarter of 2025, while the value of housing stock also increased further. Real gross fixed capital formation decreased by a further 1.7% in the first quarter of 2025, driven by reduced capital spending by private business enterprises, while capital outlays by public corporations and general government increased 'An increase in business confidence is imperative to drive investment and accordingly economic growth, with expectations for growth having eased notably this year to 0.9%,' said Investec economist, Lara Hodes. Nedbank economist, Johannes Matimba Khosa, said household finances were expected to remain relatively healthy in 2025 despite the expected uptick in inflation off a low base. Khosa said this, along with higher wage settlements in the public sector, will continue to support real personal disposable income. He said lower interest rates and withdrawal from the Two-Pot retirement system will also help reduce debt service costs. 'However, the recovery in household finances will be partly contained by uncertain employment prospects. Given excess capacity and a volatile global environment, companies will hesitate to expand operations,' Khosa said. 'The US tariffs, weak global demand, and subdued commodity prices will impact job creation in exportoriented industries. At the same time, growth in government employment will be contained by fiscal consolidation.' BUSINESS REPORT
Irish Independent
5 days ago
- Business
- Irish Independent
The week ahead in business: Michael Bloomberg visit to Dublin, Eurogroup candidacy and CSO population data
The founder of Bloomberg will the first speaker at a forum that is being styled 'The Future of Finance'. Such events invariably include a 'fireside chat' – yes, even in the height of summer – and on this occasion it will feature Finance Minister Paschal Donohoe in conversation with Stephen Carroll of Bloomberg News. Also appearing will be Mary-Elizabeth McMunn, deputy governor at the Central Bank of Ireland, and Colin Hunt, the CEO of newly independent AIB, who is being tipped for a big pay rise now that the aforementioned Mr Donohoe has lifted a salary cap on the bank. Staying with the finance minister, and next Friday is the deadline for a challenger to his position as president of the Eurogroup. So far he is the only finance minister among the 20 countries in the eurozone to announce his candidacy for what would be a third term in charge. On Thursday we get a quarterly economic commentary from the ESRI, which may challenge the record for the most mentions of the word 'uncertainty' in a single economic document. The Central Bank managed 47 usages in its Quarterly Bulletin last week. Statistics wise, tomorrow the CSO will have Irish population estimates from administrative data sources for 2023, and on Friday it will have an update on the number of people who have arrived from Ukraine. Finally, most weeks feature a discussion about artificial intelligence and what it all means, and this week's is being hosted by the Institute of International and European Affairs at its Dublin offices tomorrow. There's a 'keynote address' from Niamh Smyth, the junior minister at the Department of Enterprise who has special responsibility for AI. In the subsequent panel discuss, the assistant secretary in the Department, Jean Carberry, will be among the participants.
Reuters
27-03-2025
- Business
- Reuters
South Africa shifts to FDI inflows in fourth quarter, central bank says
JOHANNESBURG, March 27 (Reuters) - South Africa recorded foreign direct investment inflows of 7.5 billion rand ($411.76 million) in the fourth quarter, compared to outflows of 3.2 billion in the third quarter, central bank data showed on Thursday. The South African Reserve Bank said in its Quarterly Bulletin that the inflows were due to increased equity investment in domestic subsidiaries by non-resident parent companies. Portfolio investments recorded smaller inflows of 33.4 billion rand in October-December, compared to inflows of 45.6 billion rand in the third quarter. "Non-residents' net acquisition of debt securities, which included the proceeds from national government's issuance of two international bonds amounting to $3.5 billion, outweighed their disposal of equity securities," the central bank said. ($1 = 18.2144 rand)
Bloomberg
27-03-2025
- Business
- Bloomberg
South Africa Sees Foreign Stock Selling as Investors Opt for Bonds
Foreign investors sold off South African equities at the fastest pace in more than a year in the fourth quarter of 2024, as they piled into the nation's bonds, leading to smaller portfolio inflows. Portfolio inflows fell 26% to 33.4 billion rand ($1.8 billion) in the quarter, compared with the prior three months, the South African Reserve Bank said in its Quarterly Bulletin published on Thursday.
