Inflation continues to have a dampening effect on the salaries South Africans take home leading to sharp dip in disposable wages in October‚ BankservAfrica’s Disposable Salary Index showed on Thursday.
On a nominal basis‚ average take-home salaries grew by 3.5% in October 2016 compared to October 2015. But when taking inflation into account the actual‚ real disposable salaries dropped for a fifth month in a row – by 2.6% on a year-on-year basis.
The average disposable salary was R13‚413.00 in October while the typical disposable salary was R10‚061. Both of these nominal salary levels are lower than four months ago.
BankservAfrica’s head of knowledge and risk services‚ Dr Caroline Belrose‚ said this was the longest period of decline on record for real disposable salaries.
Consumers are expected to remain under pressure.
Mike Schüssler‚ chief economist at Economists dotcoza said currently domestic consumption was bleak. “Higher consumer inflation is likely to compound the weak domestic economy with real retail sales declining‚ along with home and car sales.”
The index results also show that the average salary has been unable to beat inflation in the past three years. Real salaries are at levels similar to October 2013.
Consumer inflation is now at 6.4% after rising 0.5% from September 2016‚ Statistics South Africa said on Wednesday. It remains outside of the Reserve Bank’s target range of 3-6% and while an interest rate hike was not expected this year it would be inevitable in 2017‚ economists have said.
The BankServAfrica Private Pension Index data‚ which was also published on Thursday‚ showed that private pension take-home continues to outpace inflation and has grown by 8.4% year-on-year in real terms.
Belrose said median and average pension for private pensions has beat inflation for 27 consecutive months. “This means that for the first time on record‚ average pensions have reached a level of 48% compared to average salaries‚” she said.
Private pension payments have exceeded salary increases over the past four years.
The results also showed the number of pensioners receiving less than R10 000 per month decreased by 8%. Those receiving more than R10 000 per month increased by 86%. However‚ the largest percentage of pensioners still remains below the R4 000 per month category. – TMG Digital
Take-home salaries continue to be dampened by inflation
Inflation continues to have a dampening effect on the salaries South Africans take home leading to sharp dip in disposable wages in October‚ BankservAfrica’s Disposable Salary Index showed on Thursday.
On a nominal basis‚ average take-home salaries grew by 3.5% in October 2016 compared to October 2015. But when taking inflation into account the actual‚ real disposable salaries dropped for a fifth month in a row – by 2.6% on a year-on-year basis.
The average disposable salary was R13‚413.00 in October while the typical disposable salary was R10‚061. Both of these nominal salary levels are lower than four months ago.
BankservAfrica’s head of knowledge and risk services‚ Dr Caroline Belrose‚ said this was the longest period of decline on record for real disposable salaries.
Consumers are expected to remain under pressure.
Mike Schüssler‚ chief economist at Economists dotcoza said currently domestic consumption was bleak. “Higher consumer inflation is likely to compound the weak domestic economy with real retail sales declining‚ along with home and car sales.”
The index results also show that the average salary has been unable to beat inflation in the past three years. Real salaries are at levels similar to October 2013.
Consumer inflation is now at 6.4% after rising 0.5% from September 2016‚ Statistics South Africa said on Wednesday. It remains outside of the Reserve Bank’s target range of 3-6% and while an interest rate hike was not expected this year it would be inevitable in 2017‚ economists have said.
The BankServAfrica Private Pension Index data‚ which was also published on Thursday‚ showed that private pension take-home continues to outpace inflation and has grown by 8.4% year-on-year in real terms.
Belrose said median and average pension for private pensions has beat inflation for 27 consecutive months. “This means that for the first time on record‚ average pensions have reached a level of 48% compared to average salaries‚” she said.
Private pension payments have exceeded salary increases over the past four years.
The results also showed the number of pensioners receiving less than R10 000 per month decreased by 8%. Those receiving more than R10 000 per month increased by 86%. However‚ the largest percentage of pensioners still remains below the R4 000 per month category. – TMG Digital
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