Towards Official Balance Sheet Estimates for South Africa`s Household Sector

Official balance sheet estimates for the household sector are not currently available in South Africa. Yet with South Africa`s well-developed financial sector and deep capital markets, asset market channels are likely to be important determinants of aggregate consumer spending and saving, consumers` demand for credit and their broad money holdings. The current paper aims to produce comprehensive estimates of household balance sheets for South Africa. The paper draws, where feasible, on best practice from the Office of National Statistics of the U.K.. The paper assesses the quality of the data sources and suggests areas where additional surveys or improvements in data collection procedures would be helpful to further improve the quality of the balance sheet estimates. Furthermore, quarterly balance sheet measures to 2003 are provided, and linked to quarterly measures constructed in Aron and Muellbauer (2006a). The main balance sheet categories are liquid assets, household debt and various categories of illiquid financial and tangible assets, including pension wealth, directly held shares and bonds, and housing. Revised debt estimates and new estimates of tangible assets for households and unincorporated businesses are provided. The South African Reserve Bank aims to publish selected items of the quarterly household balance sheets in its Quarterly Bulletin on an ongoing basis. The paper describes the trends of the estimates of the household sector`s balance sheets and of total net wealth. The paucity of data for developing and emerging market countries is illustrated by means of a survey, and lessons are drawn from the South African research for the compilation of household sector balance sheets.