According to Shergeran Naidoo, BankservAfrica\u2019s Head of Stakeholder Engagements, the constant load shedding, high production costs due to high fuel prices and rising wage demands, as well as elevated interest rates and moderating demand, are all contributing to the dismal growth prospects faced by companies.<\/p>\n
“With many resorting to redirecting their capital earmarked for investment towards self-sufficiency and becoming less dependent on Eskom, employment growth and salary increases are likely to be impacted,” he said,<\/p>\n
Independent economist Elize Kruger noted that consumer inflation has been moderating slowly, resulting in the ongoing erosion of the purchasing power of households. Inflation reached a 13-year high of 6.9% in 2022, and is forecasted to average at around 5.7% in 2023.<\/p>\n
\u201cConfirming this trend, BankservAfrica\u2019s data indicated a notable 13.7% y\/y decline in the average real take-home salary in January 2023, compared to a year earlier. This trend has subsequently filtered through to lacklustre household consumption expenditure,\u201d Kruger said.<\/p>\n
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StatsSA data recently indicated that real retail sales only increased by 1.7% in 2022 compared to 6.3% in 2022.<\/p>\n
While employment levels increased notably in 2022 – though still catching up to the job losses incurred during the Covid-19 pandemic – January 2023 showed the opposite.<\/p>\n
\u201cAdjusted for weekly payments, BankservAfrica\u2019s data suggests that 606,500 fewer salaries were paid into South Africans\u2019 bank accounts in January 2023 compared to the previous month.<\/p>\n
“Sixty per cent of these job losses occurred in salary categories for people earning less than R5,000 per month, confirming that it is most likely a reversal of temporary jobs created for the annual festive season in December,\u201d Kruger said.<\/p>\n
The BankservAfrica Private Pensions Index (BPPI) in nominal term remained flat compared to December.<\/p>\n
The average pension paid was R10,021 in January, which was 6.9% higher than one year earlier, and slightly above the monthly average in 2022, which was R9,982, BankservAfrica said.<\/p>\n
The value of total take-home pay and private pension payments (less than R100,000 per month) processed by BankservAfrica in January 2023 increased by 7.9% in real terms, and by 15.3% in nominal terms, compared to a year earlier, not seasonally adjusted.<\/p>\n
\u201cWith little indication of a notably different economic environment in 2023, the job market is likely to remain strained, as the main economic challenges prevail,\u201d said Kruger.<\/p>\n
On the positive side, the 2023 National Budget, presented by Finance Minister Enoch Godongwana on 22 February, included no changes to major tax rates or the fuel levy, while the Minister provided relief for \u2018bracket creep\u2019, where an employee pays higher tax following an inflation-related salary increase, ending worse off after-tax.<\/p>\n
Granting tax relief by adjusting personal income tax brackets and rebates for the effect of inflation cost the state a notable R15.7 billion, a sizeable benefit to taxpayers.<\/p>\n
Furthermore, R4 billion in relief is provided for households that install solar panels and R5 billion to companies through an expansion of the renewable energy incentive.<\/p>\n
However, these measures are unlikely to make a material difference to the economic growth prospects for 2023, but rather in the medium term.<\/p>\n
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