It’s no secret the majority of South Africans are feeling the pinch. There’s nasty inflation; interest rates keep rising; the high costs of fuel and food ensures the price of nearly everything in turn goes up; people have to fork out more money to deal with ways to combat load shedding – those that can – and those with children have just been hit by all the extra costs associated with back to school.
Ouch! On top of all that it’s Januworry. It’s no surprise, then, that according to the TransUnion’s Q4 Consumer Pulse Study late last year, 38% of South African consumers are unable to pay their bills – even though they are spending less.
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In fact, two out of three consumers surveyed said they reduced discretionary spending – eating out, travel and entertainment over the past three months – while 37% said their priority is to pay off their debt faster. Clever people.
Weihan Sun, director of research and consulting at TransUnion Africa, said: “A continued high inflationary environment, coupled with more anticipated interest rate hikes, is likely to tip more consumers into default, with severe repercussions for the local retail sector.”
However, less – and wiser – spending on those “luxuries” won’t help the economy. Seems like we are damned if we do save, damned if we don’t.
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