The deterioration of South Africa’s national savings ratio to 13,75% of gross domestic product in the fourth quarter of 2006 has brought the annual savings ratio to an historic low of 14% in 2006, South African Reserve Bank (SARB) data showed on Thursday.
The ratio of gross saving to gross domestic product at 13,75% in the fourth quarter of 2006 matches awkwardly with the 14,25% increase registered in the third quarter. The third quarter figure has been revised from 14,75%.
The gross savings ratio of the household sector declined from 1,75% in 2005 to 1,5% in 2006, the data shows.
The SARB said this reflected “a sustained strong propensity to consume”.
“After allowing for depreciation, the household sector’s consumption exceeded its income in the calendar year 2006, resulting in the first-ever net negative saving by the household sector for a full year. Simultaneously, the household sector debt relative to disposable income reached a new high of 73,75% in the fourth quarter,” the SARB pointed out. — I-Net Bridge