QUICK READ Consumers

The Momentum Unisa Consumer Financial Vulnerability Index rose slightly in the fourth quarter of last year (to 50.5 points from 50.3 points in the third quarter), showing that South African consumers were less financially vulnerable than in the previous quarter. It also shows a marked improvement on the previous year, 2020, when the index averaged 43.4 points. Breaking down the index into its four components, consumers were less vulnerable in terms of their income, their debt servicing vulnerability was lower, their expenditure vulnerability was lower, but their savings vulnerability increased. The report attributes this to many consumers having to forego contributions to employee benefits, such as saving for retirement, while others delved into their savings to fund their day-to-day expenses.

Interest rates are higher after Thursday’s announcement by the SA Reserve

Bank’s Monetary Policy Committee. The repo rate jumps by 25 basis points to 4.25%, pushing the prime lending rate to 7.75%. CEO of RE/MAX of Southern Africa, Adrian Goslett, predicted that interest rates would climb in response to rising inflation and the global instability surrounding the Russia-Ukraine conflict. “South Africans will have to tighten their belts. Rising fuel and food costs, as well as higher debt repayments, will undoubtedly put pressure on household budgets,” he says. The interest rate hike came a day after the announcement by StatsSA that inflation in February had risen to 5.7% year-on-year.