As South Africans transition into 2025, an unexpected wave of optimism surrounds their financial futures despite the seasonal trend of overspending during the festive December holidays.
A recent survey conducted by research company InfoQuest shed light on consumer behaviour, revealing that nearly 60% of respondents overspent their budgets in December, with only a third managing to adhere to financial limits.
Claire Heckrath, managing director of InfoQuest, said Wednesday that many South Africans were approaching 2025 with surprising optimism overall.
“What’s not surprising is that many South Africans overspent during the December holidays – and the most popular goal for the year is paying off debt,” she said.
This financial conundrum becomes particularly pressing as families face early-year expenses, like school uniforms and stationery, due to the timing of January paydays often falling after school term begins.
Despite these challenges, the survey of 401 respondents showcased a notable shift in perspective, with 70% expressing positive expectations for their financial situation in the coming year.
Interestingly, older consumers, specifically those aged 50 and above, displayed a more cautious outlook compared to their younger counterparts.
Heckrath added that in terms of personal financial priorities for 2025, paying off debt was top of the list for the majority of consumers.
“Many individuals are focused on their primary financial goals, including paying off debt, building savings, and starting their own businesses. These goals reflect an optimistic spirit, as well as a determination to regain control over their finances and improve their personal economic stability,” she said.
While optimism pervades consumer sentiment, experts acknowledged the ongoing economic challenges such as inflation and high unemployment rates.
Professor Waldo Krugell, an economist from the North-West University, expressed encouragement in observing consumer optimism reflected in survey responses.
“It aligns with what we have been seeing in the StatsSA consumer spending numbers from November and the BankServAfrica numbers for December. The optimism is well founded on forecasts for much stronger economic growth in the year ahead,” Krugell said.
He added that forecasts were for economic growth of between 1.6% and 2% this year, which will hopefully come with some job creation as well as pay increases.
“There are many downside international risks (mainly from US President DonaldTrump), but as South Africans, we are optimistic.”
Efficient Group chief economist, Dawie Roodt, predicted that economic growth for 2025 would surpass that of 2024.
“My expectation is that 2025 economically will be better than last year. Economic growth for 2024 is going to be less than 1%, and in 2025, I expect it to be above 1% growth. There are some factors that have led to a positive outlook, such as the Government National Unity and the markets improvement,” he said.
Roodt added that the 1.5% gross domestic product (GDP) was still not enough growth for South Africa.
“It does show that we feel more complacent when there is a slight improvement in GDP growth. We still need to relook at our policies and aim for growth around 6%, it can be done,” he said.
BUSINESS REPORT