{"id":64986,"date":"2024-04-25T09:35:53","date_gmt":"2024-04-25T09:35:53","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa"},"modified":"2024-04-25T09:54:55","modified_gmt":"2024-04-25T09:54:55","slug":"good-news-for-salary-hikes-in-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa","title":{"rendered":"Good news for salary hikes in South Africa"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Employed South Africans could finally find some relief in 2024, with salary hikes in the country expected to outstrip inflation after two years of falling short.<\/p>\n

Salary hikes are expected to average 6.9% in 2024, while inflation will likely average 5.0%, giving a 1.9% real increase.<\/p>\n

According to Nedbank\u2019s latest State of the Economy report for April, households in South Africa have been stretched thin over the last few years.<\/p>\n

Real (inflation-adjusted) personal disposable income (PDI) contracted 0.3% in 2023, having slowed throughout 2022.<\/p>\n

The main culprits behind the decline have been inflation\u2014eroding pay\u2014and persistently high interest rates, which have been keeping debtors in a chokehold.<\/p>\n

\u201cDespite aggressive nominal wage increases of around 6% on average and higher employment, real or inflation-adjusted compensation of employees (COE), which account for just over 71% of PDI, contracted by a sharp 2.3% in 2022 before shrinking by a further albeit less severe 0.8% in 2023,\u201d the banks said.<\/p>\n

However, this is expected to turn the corner in 2024, with South African salaries projected to increase by between 6.5% and 7.2% (average 6.9%) in 2024, Nedbank said, citing the latest Wage Settlement Survey by employment advisory firm, Andrew Levy.<\/p>\n

Inflation, meanwhile, is forecast to recede further, averaging around 5% in 2024, pointing to real wage growth of about 1.9%.<\/p>\n

According to the latest BankservAfrica Take-Home Pay Index, the group\u2019s data aligns with the South African Reserve Bank\u2019s forecast of an average salary increase of 6.1% in 2024.<\/p>\n

Echoing Nedbank\u2019s forecasts, with inflation expected to ease, this will likely lead to higher real disposable income in the coming months.<\/p>\n

The rub<\/p>\n

Unfortunately, Nedbank said this potential boost could be contained or countered by renewed job losses and high interest rates.<\/p>\n

\u201cAccording to the Labour Force Survey, employment declined slightly in Q4 2023, falling by 0.1% over the quarter after eight quarters of consistent job gains.<\/p>\n

\u201cAbout 22,000 people lost their jobs in Q4, which, together with the increase in the labour force, pushed the unemployment rate up slightly to 32.1% from 31.9% in Q3, only fractionally better than 32.7% at the end of 2022 but still considerably lower than 35.3% at the end of 2021.\u201d<\/p>\n

The Quarterly Employment Survey paints a bleaker picture, it said, showing that total formal sector employment shrank by 1.8% qoq in Q4 2023, with full-time employment down a marginal 0.1% while part-time employment plunged 13.5%.<\/p>\n

\u201cGiven the persistent pressure on company profits over the past two years, and with no meaningful economic upturn in sight, the risk of further job losses remains relatively high,\u201d Nedbank said.<\/p>\n

Interest rates a worry<\/p>\n

While the data suggests great news for salaries in South Africa, Nedbank said that the reality is that, on top of a weaker labour market, households are likely to remain under pressure due to the Reserve Bank\u2019s highly restrictive monetary policy.<\/p>\n

This is also expected to linger for much longer than many economists had anticipated at the start of the year.<\/p>\n

\u201cThe full impact of the 475 bps jump in interest rates is taking hold. Debt service costs gradually increased throughout 2022 and 2023, systematically consuming a more significant share of disposable income and squeezing the funds available for discretionary spending,\u201d Nedbank said.<\/p>\n

The ratio of debt service costs to disposable income climbed to 9% by the end of 2023, and the personal saving rate fell deeper into the red at -1.1% of disposable income, it said.<\/p>\n

\u201cHouseholds tightened their belts, containing borrowing and spending. More consumers struggled to meet debt repayments…and most commercial banks reported a significant increase in repayment arrears in 2023.\u201d<\/p>\n

While rising real incomes will provide some relief, the pressure will ease meaningfully only once interest rates start decreasing, Nedbank said.<\/p>\n

Unfortunately, this does not seem to be on the cards anytime soon.<\/p>\n

Even if Nedbank\u2019s projections of 50 basis points being cut by the end of the year come true, the bank conceded that it may prove \u201ctoo little, too late for 2024\u201d.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Employed South Africans could finally find some relief in 2024, with salary hikes in the country expected to outstrip inflation after two years of falling short. Salary hikes are expected to average 6.9% in 2024, while inflation will likely average 5.0%, giving a 1.9% real increase. According to Nedbank\u2019s latest State of […]<\/p>\n","protected":false},"author":84,"featured_media":64985,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-64986","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nGood news for salary hikes in South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"Employed South Africans could finally find some relief in 2024, with salary hikes in the country expected to outstrip in ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Good news for salary hikes in South Africa\" \/>\n<meta property=\"og:description\" content=\"Employed South Africans could finally find some relief in 2024, with salary hikes in the country expected to outstrip in ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-25T09:35:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-25T09:54:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1714026217.829564.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Good news for salary hikes in South Africa\",\"datePublished\":\"2024-04-25T09:35:53+00:00\",\"dateModified\":\"2024-04-25T09:54:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\"},\"wordCount\":642,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1714026217.829564.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/good-news-for-salary-hikes-in-south-africa\",\"name\":\"Good news for salary hikes in South Africa - 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