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Johannesburg - Hard-pressed consumers are facing a slew of price increases in July that will severely impact on their debt burden, said Neil Roets, CEO of Debt Rescue.
The combined effect of the fuel price increase, the electricity price increase in Johannesburg and the increased ticket price by Metro Rail in the Western Cape, which will all kick in early in July are expected to have a severe impact on already hard-pressed consumers.
City Power announced that it would increase its tariffs by an average of 7% from July 1, after the National Electricity Regulator of SA (Nersa) approved hikes.
Metrorail announced that train tickets would increase on July 1 with the cost of single tickets increasing by 50 cents, return tickets by R1.
Weekly ticket increases range between R3 and R7, while monthly tickets increase between R7 and R30, it said in a statement.
Roets said these increases could lead to many more South Africans falling into the debt trap.
It is also going to place added pressure on the reserve bank to curb inflation, which is above its 3% to 6% target band.
It could rise further in a deteriorating domestic economic environment according to Deputy Central Bank Governor Daniel Mminele.
Roets said rising food and fuel costs and slow economic growth are making it difficult for many South Africans to pay back their loans on time.
One in every four South Africans is unemployed and the number of borrowers who are three or more payments in arrears has risen to nearly 50%.
“The writing is on the wall for many middle class families who have only recently escaped from dire poverty. Many will be pushed back into poverty,” said Roets.
The combined effect of the fuel price increase, the electricity price increase in Johannesburg and the increased ticket price by Metro Rail in the Western Cape, which will all kick in early in July are expected to have a severe impact on already hard-pressed consumers.
City Power announced that it would increase its tariffs by an average of 7% from July 1, after the National Electricity Regulator of SA (Nersa) approved hikes.
Metrorail announced that train tickets would increase on July 1 with the cost of single tickets increasing by 50 cents, return tickets by R1.
Weekly ticket increases range between R3 and R7, while monthly tickets increase between R7 and R30, it said in a statement.
Roets said these increases could lead to many more South Africans falling into the debt trap.
It is also going to place added pressure on the reserve bank to curb inflation, which is above its 3% to 6% target band.
It could rise further in a deteriorating domestic economic environment according to Deputy Central Bank Governor Daniel Mminele.
Roets said rising food and fuel costs and slow economic growth are making it difficult for many South Africans to pay back their loans on time.
One in every four South Africans is unemployed and the number of borrowers who are three or more payments in arrears has risen to nearly 50%.
“The writing is on the wall for many middle class families who have only recently escaped from dire poverty. Many will be pushed back into poverty,” said Roets.
