Resumen

DE JONGH, JJ  y  MNCAYI, NP. An analysis on the key Macroeconomic drivers of consumer vulnerability in the South African economy. JCMAN [online]. 2019, vol.16, n.1, pp.290-312. ISSN 1815-7440.  http://dx.doi.org/10.35683/jcm197.0015.

A country's middle class and its associated consumption power play a significant role in its progress towards economic development. Consumers have the ability to foster an accumulation of human capital, savings and induce an expansion of domestic markets. Despite this inherent potential, South African consumers, over the last decade, have illustrated subdued expenditure patterns, facing high levels of debt and uncertainty in employment and income which point to a large degree of consumer vulnerability. The primary objective of this study was to identify the key macroeconomic drivers that have contributed to this position. A quantitative research approach through the use of quarterly time series data from 1995Q1 to 2018Q4 was used whilst an autoregressive distributed lag (ARDL) model was employed. The results provide a comprehensive outlook on the macroeconomic drivers that have contributed to the vulnerable position of many South Africans. Amongst the most telling, specifically in the short run, include inflation and unemployment levels. Results further revealed that interest rate changes, low economic growth as well as concerning fiscal sustainability measures induced significant long term consequences. Together with the causality analysis, the findings illustrate a vicious cycle of an unhealthy consumption climate. The continued deterioration of consumption patterns signifies the existence of structural barriers, restricting consumers' contribution towards a more inclusive growth climate. Addressing this aspect therefore requires a multipronged approach including innovative labour market reforms, the promotion of political stability and a more flexible monetary framework that can assist in achieving long-term economic growth. JEL CLASSIFICATION: E21, E52, E62

Palabras clave : Key phrases; ARDL; consumer vulnerability; fiscal policy; monetary policy and South Africa.

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