Disposable income slower than inflation

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CorporateBusiness

Johannesburg - BankservAfrica’s Disposable Salary Index (BDSI) released on Friday indicated that the increase in disposable income would again be slower than inflation this year.

“Although South African consumers had some financial relief over December as their take-home pay was higher... indications are that the increase in disposable income will once again be slower than inflation for the rest of the year,” BankservAfrica regulated products chief executive Brad Gillis said in a statement.

“This simply means higher prices, with less money to pay the bills - most certainly unwelcome news, especially for 70 percent of the workforce who take home less than R12,000 per month.”

Gillis said South African take-home salaries averaged R11,641 in February, which was 6.4 percent higher than a year ago.

“However, in real terms, take-home pay increased by only 0.5 percent in December year-on-year. After being smoothed and adjusted, the BDSI actually declined with R12 between December 2013 and January 2014,” he said.

It seemed that South Africans with formal sector jobs had in general received take-home pay increases above the rate of “official inflation”, despite the rate of real increases fast declining.

“It is quite possible that South African disposable salaries will again dip below the rate of inflation as inflation increases and salary increases decline in nominal terms.” - Sapa


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