SA Consumer Wallet update

We have updated our Consumer Wallet model, which measures growth in consumer spending power and serves as a proxy for the likely level of retail sales growth this year.


We lower our forecast job growth for 2024 from 4.6% y-y to 2.8% y-y, which could result in 469 000 new jobs. We maintain our forecast 5.0% y-y average wage increase, as we believe the improved electricity supply situation could support the positive momentum in wage growth.


The National Treasury has set an ambitious target for 2024/25 personal tax collections, aiming to increase collections by 13.7% y-y. This can only come from increased tax compliance, as tax rates remain unchanged, and would increase the tax burden on the consumer by R89bn.


Based on the latest estimates, the spending power of the consumer in 2024 may be lower than our initial forecast, with a 6.6% y-y increase in funds available for retail and discretionary spending. However, the implementation of the Two-Pot retirement system in September could result in a R20bn boost to the Consumer Wallet, which would increase the growth rate to 7.5% y-y.