Picture: David Ritchie

JOHANNESBURG  - The financial vulnerability of South African consumers improved slightly in the third quarter of this year from the second, but this was far from a turnaround, a joint report by insurance firm Momentum and long distance university Unisa showed on Wednesday.

The Momentum/Unisa Consumer Financial Vulnerability Index edged up to 49.7 in Q3 from 49.1 in Q2, but remained in the "very exposed category".

"This was caused by consumers’ realisation that the so called ‘new dawn’ that was expected after Mr Ramaphosa became president will not materialise over the short-term," Momentum and Unisa said, alluding to the optimism that greeted Cyril Ramaphosa's replacement of the unpopular Jacob Zuma as president in February, but has since waned somewhat.

Zuma, who has denied charges of corruption, presided over nearly a decade of sluggish economic growth in which annual GDP expansion has largely languished below one percent while unemployment remains stubbornly high at around 27 percent of the labourforce.

The National Treasury has cut the 2018 economic growth forecast to 0.7 percent from 1.5 percent.

"Consumers are still experiencing huge pressure on their cash flow with many of them failing to satisfy all their financial commitments in terms of saving, spending and debt servicing," the Momentum/Unisa report said.

It said 50.5 percent of people surveyed believed that general prices would increase even more rapidly to the end of the second quarter of 2019, while 43.2 percent believed unemployment would rise further.

"These views expressed by key informants to a large extent reflect the views of the Momentum/Unisa research team," it said.

"It is being expected that during 2019 economic growth, employment growth and household income growth will remain subdued coupled with higher price increases thus putting further financial stress on many already financially vulnerable households."

- African News Agency (ANA)