ARE CONSUMERS REALLY UNDER CREDIT PRESSURE?
Truworths results shared an interesting comment: “Management feels that the credit environment is steadily improving despite the current tough economic environment.” I have been wondering about this. Everybody seems to assume t hat consumers are under i ntense pressure, but are they? Even with recent interest rate hikes we’re at multi-decade lows and while the economy is very gloomy, that does not automatically mean the consumer is as well. Certainly we’re not seeing bad debts exploding, as they remain largely f lat. The risk of course is weakening consumers going forward as rates increase and the rand weakens.