We woke up this morning with the knowledge that fuel prices not increasing as the Department of Transport decided to absorb the increase for the month of September 2018. The good news is short lived as economist already expecting a fuel price increase for October 2018 upwards of R 1,00 / L and higher if the rand remains weak against the dollar and oil prices do not reduce drastically.
Another bit of bad economic news was that South Africa is in, what they call, a technical recession as negative growth in our economy evident over the past two periods.
No surprise. The unemployment figure keeps going up and official figure around 27% yet if the people added no longer trying to find employment the figure is as high as 37% or some 21 million people of the 57 million people living in South Africa. According to latest data some 9,8 million people are full time employed albeit this excludes the informal market.
Politics are heating up with the next general election set for 2019 and as expected political parties starting to heat up discussions how they plan to eradicate poverty and inequalities etc. to vow voters for voting for them. Land expropriation without compensation a hot topic now. It can result in further economical woes if not managed correctly by Government.
Then credit bureau data shows 25,3 million people have an active credit record with 9,7 million having an impaired credit record. It thus mean that 15 million consumers are in good standing.
From the above it is clear South Africa economy remains vulnerable and its consumers to face the brunt if economy is not managed carefully. When fuel price goes up so does price of consumables. If consumable prices increase so does inflation and then interest rates.
Our concern remains that less and less people will be able to contribute towards tax revenue to fund Government's responsibilities towards Education, Health services and Social Grants, to name a few. More tax increases required to balance the books.
Some consumers can cut back on non essential items but for a large part they are spending their income on necessities and are just not able to cut back any further. Unable to afford unexpected expenses or continued price increases and only solution is to obtain a loan to fund those shortfalls. That is unfortunately the first step to become overindebted and find them soon in the downward debt spiral.
Limited mechanisms exist to deal with over-indebtness one being Debt Counselling or also known as debt review. Process in which debt payments and finance charges are reduced in order for a consumer to afford both the required living expenses and debt payments and a manner in which one can become debt free.
Don't let debt be a chain and ball sucking your happiness from you. Contact us sooner than later in order to assist and be the first step towards financial freedom.
