{"id":699961,"date":"2023-06-30T08:19:21","date_gmt":"2023-06-30T06:19:21","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=699961"},"modified":"2023-06-30T08:19:21","modified_gmt":"2023-06-30T06:19:21","slug":"these-are-the-biggest-risks-leaving-middle-class-south-africa-exposed","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/699961\/these-are-the-biggest-risks-leaving-middle-class-south-africa-exposed\/","title":{"rendered":"These are the biggest risks leaving middle-class South Africa ‘exposed’"},"content":{"rendered":"\n

South African consumers are facing sustained financial pressure due to elevated fuel and food prices and power cuts, according to the latest Momentum-UNISA Consumer Financial Vulnerability Index (CFVI).<\/p>\n\n\n\n

The first quarter’s index reported a slight improvement to 49.1 in Q1 2023 from 47.0 in the final quarter of 2022. Momentum stated that this is still in the range it characterises as ‘very exposed’.<\/p>\n\n\n\n

Despite a slight improvement from the previous quarter, the current index is significantly lower than the 53.4 recorded in the first quarter of 2022.<\/p>\n\n\n\n

The index is based on a survey of various consumer-facing businesses, including banks, insurers, retailers and other credit industry institutions.<\/p>\n\n\n\n

Momentum said that the index provides a window into the psyche of consumers and the extent to which they feel vulnerable about their income, expenditure, savings and debt servicing capabilities.<\/p>\n\n\n\n

The table below illustrates the CFVI changes over the past periods:<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

According to the financial services firm, consumers improved their saving behaviour to some extent, although more so in saving for retirement than for emergencies.<\/p>\n\n\n\n

Regarding expenditure, consumers are being forced to buy less to more affordable levels in light of higher prices, particularly for food and fuel.<\/p>\n\n\n\n

In some positive outcomes, expenditure was reportedly better aligned to income, with consumers feeling more comfortable about their income being sufficient to afford their expenditure.<\/p>\n\n\n\n

Momentum said that the largest improvement in the survey related to debt servicing vulnerability, with consumers sacrificing some purchases to be in a better position to service their debt.<\/p>\n\n\n\n

Risk factors<\/strong><\/p>\n\n\n\n

In the first quarter of this year, load shedding and high food and fuel prices were the main high-risk factors affecting consumers’ financial vulnerability.<\/p>\n\n\n\n

“This was followed by unemployment, political instability and corruption and weak municipal service delivery,” said the company.<\/p>\n\n\n\n

With the top three risk factors all pointing to higher prices, affordability is a major concern, with load shedding also resulting in consumers having to resort to energy alternatives affecting purchases and their ability to save and repay debt.<\/p>\n\n\n\n

A handful of previous risk factors are expected to continue into the second quarter of this year; however, there have been some substantial changes.<\/p>\n\n\n\n

“Consumer key informants expect high fuel prices and political instability and corruption to become higher risks than increasing food prices to consumer finances in Q2 2023,” Momentum said.<\/p>\n\n\n\n

It is, however, important to note that the CFVI survey was done before 50 basis points increased the repo rate in March.<\/p>\n\n\n\n

The graph below lists the expected risks to consumer finances for the second quarter:<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\n\n\n\n

Read: These taxpayers are being targetted by criminals in South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

New data from a Momentum survey shows the risk factors facing consumers this quarter.<\/p>\n","protected":false},"author":10,"featured_media":682055,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[26,6652],"class_list":["post-699961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-headline","tag-momentum"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/699961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=699961"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/699961\/revisions"}],"predecessor-version":[{"id":700279,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/699961\/revisions\/700279"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/682055"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=699961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=699961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=699961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}