Two-pot system set to boost Black Friday spending
The recent introduction of the two-pot retirement system could provide a boost to consumer spending on Black Friday.
South Africans are expected to fill up their trolleys on the day as many stores offer highly promoted sales at discounted prices.
This year, Black Friday falls on 29 November.
The South African Revenue Service said on 13 October that a total gross lump sum of some R21.4 billion had been paid out to taxpayers who have applied to utilise their savings withdrawals benefit of the two-pot retirement system.
More than 1.2 million South Africans applied for the tax directive, with at least 1.14 million approved.
“I think the two-pot system will add more money into the economy, which will probably boost the retail sector during the silly season. Hence, a good retail season is expected,” predicted Efficient Group economist Dawie Roodt.
He believes that the two-pot system could be crucial for South Africa's sluggish economy, as the lack of economic growth tends to influence consumer behavior.
READ: SARS: Two-Pot system pay-outs exceed R21 billion
The two-pot retirement system enables workers to access a small portion of their retirement savings for emergencies before they retire.
At the same time, North West University’s economics professor Waldo Krugell said lower inflation and interest rates will also help ease consumers’ concerns.
“In 2024, what we are going to see is how the small interest rates and inflation cuts will put money in consumers’ pockets.”
Krugell said Black Friday has become part of the country’s consumer culture, and people now plan and save for it.
He said economists remain hopeful that there will be increased consumer spending this festive season due to lower fuel prices and lower interest rates, among others.
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