Pretoria - Real gross household expenditure slowed in the second quarter of 2010, the Reserve Bank said on Wednesday.
Growth in aggregate real gross domestic expenditure slowed from an annualised rate of 12.1 percent in the first quarter of 2010 to 2.3 percent in the second quarter. "The slowdown in real gross domestic expenditure resulted primarily from slower growth in real final consumption expenditure by households," said the bank in its September Quarterly Bulletin.
The central bank said that growth in final consumption expenditure by households slowed to an annualised 4.8 percent in quarter two 2010 compared to the increase of 5.7 percent in the first quarter. The bank attributed this moderation in growth to further contraction in the expenditure on services alongside subdued spending on semi durable goods. Both accounted for more than 50 percent of the total household spending.
Households' real disposal income showed an increase of 5.1 percent in the first quarter of 2010 and 4.8 percent in the second quarter this as wage increases continued exceeding inflation even though the 2010 FIFA World Cup tournament created temporary jobs.
"Consistent with the slow pace of credit extended to households, the ratio of household debt to disposable income edged lower from 78.7 percent in the first quarter of 2010 to 78.2 percent in the subsequent quarter," said the bank.
The ratio of debt-service cost to disposable income receded from 8.2 percent in the first quarter of 2010 to 8 percent in the second quarter.
"Household spending is likely to remain weak during the second half of the year, constrained by weak job market prospects and still high levels of household debt," said Nedbank reacting to the bulletin.
