Johannesburg – South African consumers will spend more this year than they did last year, market analyst Fitch Solutions predicts.
In its research note, the company said household spending in South Africa will begin to recover in 2021 after taking a hit last year due to the adverse impact of Covid-19 on incomes.
Fitch Solutions based its estimates on the back of the government’s decision to move to an adjusted level one of its nationwide lockdown in response to a decreasing number of Covid-19 infections.
“We forecast real growth in household spending to expand by 3.2% year on year in 2021. This marks a recovery from the -11.9% year-on-year contraction in household spending estimated over 2020,” it said.
“We project real household spending to reach R1.7-trillion in 2021. However, we do note that this is still below pre-pandemic spending of R1.945-trillion recorded in 2019, suggesting that the consumer recovery will continue past 2021.”
Under the level one lockdown, non-essential businesses such as restaurants, bars, cafes and nightclubs are permitted to operate and all businesses are required to ensure that social distancing measures are in place.
Retail sales, which are a good indicator of consumer confidence, fell 1.3% year on year in December following a revised 4.3% contraction in November, Statistics SA said last month.
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