Today’s post shows three simple proxies of household’s marginal propensity to consume in South Africa. While the ratio of household disposable income to consumption has been flat since 2008, the ratio of cheque deposits to time deposits and the ratio of compensation to retail sales have both declined. During this period, the household saving rate has been negative on average, so this decline would be consistent with higher consumer stress, weak consumer demand and borrowing capacity. Social grant income would be reflected in disposable income, which might be one reason why the blue line is flatter than the cyan line.
