SIMON BROWN: I’m chatting now with Johann van Tonder, economist for Financial Wellness at Momentum. We are speaking about Momentum Unisa Consumer Financial Vulnerability Index’s information out for the third quarter of 2022. Johann, I recognize the early morning time.
In Q3 of this 12 months I suppose it can’t be a shock to anybody that it’s robust on the market. We’ve acquired rising [interest] charges, we’ve acquired inflation, gas down a little bit however frankly nonetheless method excessive, and naturally load shedding to throw into the combo.
JOHANN VAN TONDER: Yes, good morning. It is certainly very robust for all of us, if I could say, for the explanations you simply talked about. And then there are additionally fairly a variety of different points, if I could. If we look at what occurred simply within the second quarter in contrast to the third quarter, we now have improved, really. Vulnerability declined simply a little bit, but it surely’s nonetheless beneath the 50 [points] mark. …final quarter, we began off with huge floods in KZN, and that basically triggered devastation. And then if you happen to add it up and mix it with greater rates of interest, greater inflation and so forth, it was actually, actually robust.
But what occurred within the third quarter is, whereas within the second quarter the entry we had to household and buddies was not there, within the third quarter that improved. So consumers have been a little much less susceptible from the earnings aspect as a result of they’d acquired extra entry to funds. But, as you rightly stated, by way of expenditure that was type of neutralised by the upper gas and meals and different costs, in addition to a greater rate of interest. Consumers had to actually in the reduction of on their budgets, they didn’t have a selection. So a little bit much less susceptible, but it surely’s nonetheless extraordinarily robust on the market.
SIMON BROWN: In one sense it’s nice that folks can flip to household and buddies. It is after all distressing that persons are needing to flip to household and buddies to primarily make it by the month. That to me is maybe the most important indication of simply how robust it’s on the market for a giant swath of the nation.
JOHANN VAN TONDER: Yes. And, contemplating that about 60% of all our households don’t actually earn cash [owing] to unemployment and so forth, they’ve to flip to household and buddies. Yes, that’s the distressing half – that you just all the time have to flip to household and buddies. And one of many issues we noticed due to the upper vulnerability, if I can put it that method, relationships between household and buddies additionally deteriorated within the third quarter after all, as a result of, if you happen to all the time have to flip to any person else and it turns into the norm, it turns into robust. And it’s not simply household and buddies, it’s additionally at work with colleagues.
So what we additionally noticed there may be that relationships have gotten robust, since you’re struggling at residence, so how do you focus at work if you happen to don’t earn sufficient cash, if you happen to can’t present for your loved ones and so forth. So sure, it’s one thing that employers and your managers want to keep in mind as effectively.
SIMON BROWN: I hadn’t considered that, the work setting.
Looking to the fourth quarter [in which we are] at the moment, an hour-and-a-half in the past Eskom introduced Stage 4 load shedding. We’ve acquired charges nonetheless going greater, one other MPC assembly [with rates] virtually actually going greater once more; gas a little decrease, however at elevated ranges. It’s going to be a robust festive season. It’s unlikely to enhance and, if it does, it’ll be type of on the margins. If something, it’d really deteriorate a little additional.
JOHANN VAN TONDER: Yes. Actually we ask what to anticipate within the fourth quarter, and it’s not simply the value will increase which have come to the fore as a danger issue. It’s now radical……4:48 or additionally political points which have come to the fore as a danger issue for shopper funds within the fourth quarter. So that’s additionally now enjoying a function. It simply all provides up. And sure, the outlook is just not good.
If you add to that the strikes that we’re having, making an allowance for that folks don’t earn cash once they go on strike, it’s going to be a robust fourth quarter as effectively.
I don’t know what’s going to occur round Black Friday, as effectively, with the festive season – whether or not it’s going to be good or unhealthy or the identical. We are going to have to wait and see.
SIMON BROWN: Yes, the retailers are going to actually have their work reduce out.
Johann van Tonder, economist for monetary wellness at Momentum, I recognize the early morning insights, as all the time.
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