CONSUMER spending was high on Christmas holidays boosted by remittances from Diasporans and savings by locals despite the prevailing cash shortages in the market.
A survey by NewsDay in the capital’s central business district at the weekend showed that major retail supermarkets were packed with consumers shopping for the festive season.
The survey showed that shoppers were using debit cards to make transactions.
In the event that cash was used, the recently introduced bond notes were the currency in use.
The rise in the use of bond notes followed last week’s increase in withdrawal limit to $100 from $50.
Nearly half of shoppers interviewed, who were using cash, highlighted that they were using money they had saved at home and remittances from Diasporans to spend for the Christmas period.
“Right now, it is difficult to get cash from the banks. So it is better to use some of the money at home,” a woman who identified herself only as Grace said.
“Apart from that, we are also depending on cash from some of our relatives who live overseas.”
It is estimated that about 62% of adults in the country participate in financial activities to save money.
Economist Kipson Gundani yesterday told NewsDay that despite the harsh economic climate, the festive season traditionally was a time when consumers spent more than on any other period in the year.
“Naturally, towards the festive season, consumer expenditure just shoots up because it is a festive season, which is the traditional reason why we have more shoppers than any other time in the year,” he said.
“Secondly, because of the bond notes issue, there were a lot of people who were holding cash at home and not disposing of it, but due to it being the festive season, were forced to buy something for the family.
“Thirdly, if you look at the expenditure towards the festive season, they are driven by emotion and feelings, which is why there is the so-called ‘January disease’. There is little rationality towards the festive season because it is traditionally known as the spending period. So even if people do not have money, the expenditure just goes up.”
Gundani said apart from cash at home, consumers were also able to spend due to remittances received from family members living abroad.
–Newsday