CRA Personal Finance – South Africa
By MWANGI GITHAHU
Cape Town – South Africans are less concerned about the Covid-19 pandemic and more about unemployment and the state of the economy, according to a recent survey.
Only 21% of those surveyed were working as per usual and 52% highlighted that prices of goods they usually buy had significantly increased.
The survey reflects consumer sentiment and behaviour during level 4 of the lockdown, from May 26 to June 2. The surveyors interviewed a representative sample of 450 online SA consumers from LSM 7 to 10 during each lockdown level.
Rachel Thompson, insights director at consumer researcher GfK South Africa, said: “With the majority of consumers reporting decreased income and higher prices, South Africans are feeling the financial pressure.
“Around 86% of respondents said they were extremely concerned about unemployment compared to 80% in GfK’s survey during the level 5 lockdown.
“By comparison, 66% said they were extremely worried about Covid-19, down from 80% in level5, when the virus was their top concern. Some 74% said they were extremely concerned about an economic crisis during level 4.
“Some 70% reported negative feelings such as fear and sadness during the level 4 lockdown, 43% said they were bored, and 42% said they were anxious. Consumers also appear to be resigned to deep change in their lives, not much of it positive.
“Almost half – 46% – told us they expect their work situation to be worse after the crisis, and 68% expect many small businesses to close. Most – 79% – predict that working from home will become the norm.”
Looking to life beyond the pandemic, she added: “Some 43% of consumers reported they are looking forward to shopping, while 14% said that they would avoid going to physical stores and shopping malls. However, 27% indicated they would increase their use of home delivery.”
In a report released on Monday, the Bureau of Economic Research said: “With little over a week before the supplementary Covid-19 budget, Finance Minister Tito Mboweni has introduced the concept of zero-based budgeting. This implies that the budgeting process needed to start from scratch with every expense having to be justified. With the environment having changed so dramatically since the February budget, the adjusted numbers can no longer be based on previous budget baselines.”
Mboweni will table the supplementary budget on June 24. It will take into account of the sharp decline expected in tax revenue and table large spending adjustments to deal with the pandemic.
Absa economist Peter Worthington said: “This would mark a shift from the current approach where budget allocations use the previous fiscal year as a base for budgeting for the year ahead.
“Mboweni argued that the zero-based budgeting approach would allow the government to focus on infrastructure and other growth-boosting initiatives,” added Worthington.
Article Credit To IOL.