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Consumers felt they had less cash last year than in 2012, according to the latest MBD Consumer Financial Vulnerability Index. File photo: Simphiwe Mbokazi

Pretoria -

Consumers packed shops this festive season – ignoring concerns about the South African economy growing at its lowest pace in four years and fears that household finances have deteriorated.

Shopping malls, it seems, were filled with optimistic shoppers who purchased gifts and spent their hard-earned money.

Economist and chief strategist at Investment Solutions Chris Hart, agreed.

“We did okay for the festive season in terms of the economy. I don’t think it was exceptional but it was also nothing to worry about. I believe people were a bit careful with their finances this time around,” Hart said.

“Also many people seemed to have travelled, signalling that all is well. Bonuses were paid out and companies did what they had to do. Therefore I think we’re okay.”

But all this optimism is set to be dampened by news that petrol will be going up on New Year’s Day.

Earlier predictions came true after the Department of Energy announced on Friday that the price of petrol would increase by 39c/l and diesel by 32c/l on January 1.

The price of 93 octane unleaded petrol and lead replacement petrol will go up by 39c, and that of 95 octane by 38c.

Both grades of diesel will go up by 32c, while the price of illuminating paraffin will increase by between 39 and 52c/l.

The increase will be the second in as many months, after price of all grades of petrol went up by 17c/l at the beginning of December, coinciding with the implementation of e-tolling on Gauteng highways.

Explaining the increase, the department said the average international prices of petrol, diesel and illuminating paraffin increased during the period under review, November 29 to December 26.

The Automobile Association (AA) had earlier predicted the increase, based on the preliminary data issued by the Central Energy Fund for the first half of December which confirmed that motorists would start 2014 with a shock, as the fuel price is set for a steep hike.

“International petroleum prices had eased slightly so far in December,” said the AA head of public affairs, Graeme Scala.

Scala said the average exchange rate had continued to creep up to the R10.30 mark, which had translated into across-the-board under-recoveries in the fuel price.

“Unless there is a substantial turn-around in the exchange rate before the end of December, South African motorists will have to brace themselves for more pain at the pumps,” Scala added.

 

On the political front, Professor Steven Friedman, from Wits University, said 2013 was a year in which South Africans spent time yelling, rather than talking to each other.

It was partly the year in which party politics became competitive.

“We are surely moving towards a more competitive political system. This competitiveness will certainly benefit society. People are more powerful if politicians compete under turbulence,” he said.

With the upcoming general elections Friedman said there would possibly be more political tension.

“In the past, it hasn’t been terribly competitive, except in 2009 when Cope emerged and contested ANC votes. But even then things died down soon afterwards. The atmosphere now will consist of politicians jostling for votes yet again.”

In respect of President Jacob Zuma and the Nkandla scandal, the metalworkers’ union Numsa declaration that it no longer wanted to support the ANC in the 2014 elections and the DA calling for Zuma’s resignation, Friedman said his prediction was that Zuma was safe – for now.

The president has been criticised for spending millions on security features for his Nkandla homestead.

“Problems for him will start after the elections.

“We can certainly expect a lot of infighting within the ANC,” Friedman added.

The online shopping industry also seemed to have boomed.

 

Bid or Buy said this year’s Christmas shopping season on its marketplace and auction website was substantially better than last year.

According to the largest online shopping hub, it experienced a double-digit percentage increase in the value of purchases.

Bid or Buy operations manager Cuan Akal said there was a tremendous increase particularly in the sales of toys, kitchen appliances, the latest hi-tech devices such as tablets and smart phones.

Akal added there was also a peak at the beginning of December, when Nelson Mandela died.

This, he said, had triggered an increase in the demand and sales of Mandela memorabilia and coins.

Pretoria News


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