Debt struggles persist despite rate cut, lower inflation - DebtBusters
A financial advisory
group says that despite a repo rate cut and lower inflation levels, many people
are still struggling with unsustainable debt levels.
"There should be an opportunity for consumers to improve their financial positions by paying down their debt a little bit if they have extra money," said Benay Sager, who is with Debtbusters.
In September, the South African Reserve Bank cut the repo rate for the first time in four years to 8%.
The prime lending rate is now 11.5%.
Consumer inflation reached its lowest level since April 2021 at 4,4%, and motorists have been enjoying a five-month decline in fuel costs.
READ: Economist urging caution after repo rate cut
However, Sager says there has been little of a change in debt ratios because these cuts were relatively small.
He feels that if fuel and electricity prices dropped significantly, consumers would be better able to manage their debt.
"I think those are very important expenditures for consumers. I think there is a little bit of extra money for consumers but perhaps it's not as much.
"So, as a result we haven't really seen the debt situation in terms of debt income ratios change meaningfully for the cunsumers yet," he said.
Find us on social media
Follow the ECR Newswatch WhatsApp channel here
