Consumers under financial pressure … despite encouraging economic signs
By Martha Nangombe
THE Namibia Statistics Agency (NSA) says the inflation rate rose to 4.7 percent in August, going up from a near one-and-a-half-year low of 4.5 per cent in July 2023.
According to the Central Bureau of Statistics, this is expected to increase some consumer costs, particularly around food prices.
“GDP grew 5.8 per cent in the first quarter of 2023 over the previous quarter, recovering sharply from a 1.8 per cent fall in the previous period, and pointing to its strongest growth since the first quarter of 2013.”
Despite the reported strong growth since 2013, a new TransUnion survey, presented at Namibia’s inaugural Financial Services Summit this week, revealed a challenging financial outlook for local consumers.
Two in 10 people (20 percent) in the survey said their income increased in the last three months, while close to four in 10 people (36 percent) reported a decrease, and 45 percent anticipate being unable to pay their current bills and loans in full.
According to TransUnion’s third quarter Consumer Pulse Study, one of the significant factors contributing to the decrease in household income was job loss, with 27 percent of consumers reporting that someone in their household lost their job over the past month.
Other factors impacting decreased income included wage or salary reductions (16 percent) and owning a small business that closed or saw orders dry up.
“Many consumers have been forced to adjust their household budgets in response to these challenges, with 56 percent cutting back on discretionary spending – such as dining out, travel and entertainment – over the past three months,” said Lara Burger, TransUnion Namibia country manager.
The TransUnion survey says consumers are bracing for further financial strain.
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