Households are spending less and saving more, strengthening the likelihood of an interest rate cut tomorrow.
Fourteen of 21 economists polled by Reuters predict the Reserve Bank's monetary policy committee will cut the repo rate to 11,5percent from 12percent when central bank governor Tito Mboweni announces its verdict at 3pm.
The Reserve Bank's December quarterly bulletin, released yesterday, showed the strain of higher home and car repayments.
Household spending dropped for the first time in 10 years.
The Reserve Bank said: "Having lost considerable momentum over the preceding seven quarters, real final consumption expenditure by households declined at an annualised rate of 0,8percent in the third quarter of 2008. This was the first contraction since the fourth quarter of 1998."
The central bank's data showed higher interest rates finally prompted South Africans to borrow less and save more.
The gross saving by the household sector as a percentage of gross domestic product increased slightly from 1,2percent in the first quarter of 2008 to 1,6percent in the third quarter.
This saw the average South African household debt to income ratio improve to 75,3percent, down from its 78,2peak in the first quarter.
The Reserve Bank, which awarded its governor a 28percent pay increase this year, chastised South Africans for fuelling inflation with their wage demands.
"The rate of increase in nominal remuneration per worker was pushed higher by public-sector wage growth of as much as 15,8percent in the year to the second quarter of 2008. Although remaining at a double-digit level, private-sector nominal wage growth decelerated somewhat to 11,3percent over the period.
"The marked acceleration in nominal remuneration per worker in the public sector in the year to the second quarter of 2008 resulted primarily from steep increases in nominal wage growth in the transport, storage and communication sector at a year-on-year rate of 26,2percent, as well as at provincial level at a rate of 19,2per cent."
The current account deficit came in at 7,9percent, slightly better than the 8percent consensus from economists.
Stanlib economist Kevin Lings said: "There is little doubt that South Africa's import demand will rise noticeably as the country embarks on an extensive, and possibly unprecedented, infrastructural development programme. Consequently, the trade account is set to remain in deficit for the foreseeable future."
Standard Bank's economic team said: "Rate cuts may be imminent."