South Africans still optimistic

Robert Laing

Robert Laing

South African consumers are the world's third most optimistic, the latest biannual survey by credit and debit card association MasterCard found.

The country would have come second if pessimistic Capetonians had not dragged down the national average.

Durban consumers were found to be the most optimistic, scoring 89,6 index points, followed by Johannesburg with 83,3 points.

A gloomy 57,3 from Cape Town dragged the national average down to 78,7, placing South Africa behind Kuwait and Vietnam in the global ranking.

South Africa's rise in MasterCard's consumer confidence index for the first half of this year comes despite a five point drop from the same period last year.

Economist Mike Schüssler, who heads the South African portion of the global poll, said consumer confidence had not fallen as sharply as in the rest of the world.

MasterCard surveys people with a bank account who are not necessarily employed, and Schüssler warned this might have distorted the results. The number of South Africans with bank accounts has rocketed due to government paying welfare recipients electronically.

Welfare recipients are confident of getting a regular income, unlike working people worried about their jobs in a depressed global economy.

South Africa's unsustainably high number of welfare recipients may be why the country appears so optimistic, Schüssler said.

South Africa had five million taxpayers supporting 13million welfare recipients last year. Government's policy of raising the child support age from 15 to 18, while lowering the male retirement age from 65 to 60, will see the number of welfare recipients rise sharply to more than 16million.

MasterCard surveys people's expectations for the coming six months, with the final score based on six sub-sections: employment, economy, regular income, stock market and quality of life.

Cape Town's low score was due to a very gloomy view of the stock market, unlike Durbanites who expect a quick rebound.

Schüssler pointed out many big asset managers are based in Cape Town, so this city's opinion may be more educated.

"My impression is that people simply haven't taken notice yet of South Africa's weakening economic position," he said.