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Recession not over for consumers

Dec 17 2009 09:57

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Johannesburg - While South Africa may be technically out of recession, consumers are still in the red, debt counselling service DebtBusters said on Thursday.

"The National Credit Regulator anticipates a total of 150 000 consumers to be under debt review by Christmas," MD Luke Hirst said in a statement.

"We may have reverted back to our three percent to six percent inflation target, but to say this means we are out of the recession is not true for the average South African consumer," he said.

On average, figures showed that South Africa had 9000 new applicants for debt counselling each month.

"The contributing factor to this could be the rising number of people who have lost their jobs this year."

"When you do not have an income it is unlikely you can pay off your debt and in most cases the amount that people are earning is simply not enough to cover basic living expenses, let alone cover your liabilities," Hirst said.

According to Statistics SA, the number of people in the labour force decreased by 418 000 from 17.5 million in the second quarter of 2009 to 17.1 million in the third quarter of the year.

Hirst said that besides rising unemployment, increases in power tariffs by a possible 35% year-on-year made the outlook "gloomy".

Even though the economy had returned to growth in the third quarter, with gross domestic product increasing by 0.9% after three quarters of contraction, this did not mean that consumers should go out and celebrate just yet.

"Recovery is likely to be slow," Hirst said.

- Sapa

 
 
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