Reviewing S.African household spending patterns

Stats SA has recently released the results of the Income and Expenditure Survey, shedding light on the spending patterns of South African households. This survey, conducted over a 12-month period, focuses on gathering data on household expenditures to understand consumer behavior. The data collected from the survey is then used to update the basket and weights of the Consumer Price Index (CPI), which reflects the goods and services purchased by households and the share of expenditure on each item. To provide more insights on this data, CNBC Africa interviewed Patrick Kelly, the Chief Director for Price Statistics at Stats SA. Kelly explained that the survey aims to track the spending habits of households in detail, which helps in determining the basket of goods and services included in the CPI and their relative importance, known as weights. The recent changes to the baskets and weights of the CPI will come into effect in the January 2025 CPI report. However, there will be no revisions to historically published inflation numbers. The indices will be re-referenced, affecting the presentation of the data but not the inflation rates themselves. When asked about the key findings of the Income and Expenditure Survey, Kelly highlighted that while both incomes and expenditures have increased since the last survey conducted in 2014-15, the real growth, adjusting for inflation, has been minimal. Male-headed households tend to have higher incomes and expenditures compared to female-headed households. Additionally, white households show higher levels of spending, dominating the upper quintiles, but there has been a faster increase in income and expenditure among black households. The survey also revealed that housing, food and non-alcoholic beverages, insurance, financial services, and transport are the main categories where South African households spend their money. These trends have been consistent over time, with housing being the top expenditure category. The data further highlights significant income disparities across race and gender lines. Expert recommendations and policy interventions will be crucial in addressing these gaps effectively. Stats SA plans to delve deeper into the poverty dimensions of the results and update poverty lines to understand the number of households that can afford basic necessities. The disparities in income and expenditure are not only evident across different racial groups but also vary spatially between provinces and cities. Overall, the Income and Expenditure Survey provides valuable insights into the spending patterns of South African households, showcasing the need for targeted policy measures to address income inequalities and improve the financial well-being of all households.