Despite a tough month of lingering power supply issues, higher inflation and rising interest rates, salaries in August improved marginally, according to the latest data in the BankservAfrica Take-home Pay Index (BTPI). This is as the average nominal private pension remained above the R10 000 mark for the third consecutive month.
“The average nominal South African take-home pay recovered slightly to R14 688 in August compared to R14 360 in the previous month,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
Though down from the 2022 high of R15 614 reached in February and 1% lower on a year-on-year basis, the 2.3% monthly increase is encouraging amid the weaker economy.
“It appears that the average salary has stabilised somewhat in August,” says independent economist Elize Kruger. “From a year-to-date perspective, however, salaries have lagged compared to average headline inflation.”
In line with expectations, consumer inflation moderated slightly off the 13-year high of 7,8% in July to 7,6% in August. Though driven by the lower fuel prices, the notably higher food prices offset the impact somewhat.
The South African Reserve Bank’s decision to hike interest rates in September – with more planned for the near future – will put the average salaried worker’s finances under even more strain. The impact of this is already evident in the 8% year-on-year decline in the real average salary recorded in the BTPI. However, this pressure is expected to ease as inflation moderates towards year-end.
The trend of more people receiving salaries continue as the BankservAfrica August data reveals more jobs were created compared to a year ago. The pace of new job creation appears to have moderated somewhat, and this is most likely to be due to the economic headwinds faced.
Meanwhile, the BankservAfrica Private Pensions Index (BPPI) showed that the average nominal private pension reached R10 000 per month for the first time in June. This figure has remained above this level for the third consecutive month in August, representing an 8% year-on-year growth, according to Naidoo. In real terms, this was, however, lower than in July, at R9 655 in August and a mere 0,8% higher than a year ago.
“Although there were a few monthly real declines recorded in the first half of the year, average real pensions have held up reasonably well despite rising inflation, preserving the purchasing power of pensioners,” ends Kruger.