SA spending growth at 2.7%Comment on this story
Pretoria - Spending in South Africa expanded at an annualised 2.7 percent in the first quarter of the year after falling 3.6 percent in the last three months of 2013 as the pace at which inventories are being run down slowed, the central bank said on Wednesday.
However, household spending slowed, partly due to a rare contraction in spending on non-durable goods such as food and fuel, the bank said in its Quarterly Bulletin for the first three months of the year.
Growth in real final consumption by households also moderated for the eighth time in nine quarters, growing at 1.8 percent from 2 percent in Q4, the bank said.
Consumers were hit by slower growth in disposable income, partly because of lost income from a five-month strike in the platinum mines, and rising consumer prices.
The debt-service costs rose but households managed to incur debt at a marginally slower pace than the lacklustre growth of their incomes, keeping the ratio of debt to income at 74.5 percent in the first quarter, from a revised 74.6 percent in the last three months of 2013.
As a result of the five-month platinum strike, spending on non-durable goods such as food and fuel declined for the first time since the second quarter of 2009.
South African consumers also lost their appetite for durable goods as consumer confidence and credit extension moderated, but spending on recreational goods continued to increase at a firm pace, the bank said.
Higher spending on recreational and entertainment goods and medicine was more than neutralised by a contraction in consumer outlays on food, beverages and tobacco, and on fuel, with the price of petrol and diesel hitting new highs in the quarter. - Reuters