South Africa’s savings rate is at 0%, an all-time low
South Africa’s savings rate is at an all-time low.
The Investec Gibs Savings Index hit a record low of 56.6 in the first quarter of 2018.
The index lifted each subsequent quarter and reached 60 in 4Q/2018.
A healthy and robust savings environment means a score of 100.
There is a strong correlation between the national savings rate and economic growth.
The weak economy, high unemployment and rising cost of living make it hard for South Africans to save.
The relative ease of access to credit in South Africa is a disincentive to save.
The ease of access to retirement funds when changing jobs is also a deterrent.
Listen to the interview in the audio below (and scroll down for quotes from it).
The savings rate is approximately zero… It’s a deeply worrying number…Dr Adrian Saville, CEO - Cannon Asset Managers
It’s unsurprising that Government is a dis-saver…Dr Adrian Saville, CEO - Cannon Asset Managers
We’re over borrowing relative to the place our economy finds itself at… it’s at odds with all our economic realities…Dr Adrian Saville, CEO - Cannon Asset Managers
It’s not through lower tax rates [that the savings rate will rise], it’s through changing consumer behaviour… We are overspending… We’re underinvesting…Dr Adrian Saville, CEO - Cannon Asset Managers
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