Budget 2024: Households to buckle under high cost of living for the year - Godongwana

CAPE TOWN - Things are still not looking good for South African households with little or no relief in the short term, according to National Treasury.

This means the high cost of living will persist for the duration of the year, despite no increases to personal income tax, the fuel levy and Road Accident Fund levy - which will result in a R4 billion tax relief.

But according to National Treasury’s budget review, household consumption forecast has been revised down to 1.3% compared to 1.4% at the time of the medium-term budget.

National Treasury says household consumption remains under significant pressure after contracting for two consecutive quarters last year.

Treasury says this reflects the effects of high inflation and borrowing costs, weak consumer confidence and declining “real incomes”.

Credit growth extended to households has also steadily declined since February last year. Finance Minister Enoch Godongwana noted the high cost of living.

“Madame Speaker, we are mindful of the already high cost of living and the impact fuel prices have on food and transport costs. In this regard, we are proposing no increase in the general fuel levy. Treasury does say improvements in confidence, employment and real incomes will raise household spending over the medium term.”