SA savings rate slashed in half

Asset growth in South Africa more than halved in 2015, as the effects of accommodative monetary policy by central banks around the world put savers at a disadvantage.

International financial services provider Allianz’s latest Wealth Report shows that South Africa’s gross financial assets came in at €434 billion (R6 679 billion) during the year under review. The rate at which assets grew, fell to 3.7% from 9.3% previously, with gross.

Debt growing

Liabilities in South Africa grew by 5.7% in 2015. South Africa’s liabilities per capita of €2 070 is higher than the €1 610 average of other emerging markets.

“Moreover, at 48%, South Africa has one of the highest debt ratios among emerging markets; in Latin America or Eastern Europe, for example, no country can match South Africa in this regard,” Allianz said.

Out of 53 countries, Allianz ranks South Africa 39th – behind Mexico and above Slovakia – in terms of per capita financial assets. The country has gross financial assets of €7 961 per capita and net financial assets €5 894 per capita.

Switzerland takes top spot with gross financial assets of €260 804 per capita and net financial assets of €170 589 per capita, with gross and net financial assets in the world averaging at €31 068 and €23 330 on a per capita basis. Globally, gross financial asset growth increased by 4.9% in 2015 – after averaging at 9% over the preceding three years – to €155 trillion.

Of the three asset classes measured, growth in securities was highest at 6.1%, followed by bank deposits at 5.5% and insurance and pension funds of 3.3%. According to the financial services provider, the limits of accommodative monetary policy are leaving a mark on asset development worldwide.

“The development of financial assets has reached a critical juncture. Obviously, extreme monetary policy is losing its impact even on asset prices. As a consequence, an important driver for asset growth no longer exists. At the same time, interest rates continue their remorseless slide, deep into negative territory,” Allianz chief economist Michael Heise said in a statement.

He added that the outlook for savers is “not rosy”.

Household debt

Despite the low interest rate environment, Allianz found that households app appear to be wary of taking debt.