Rocky Road ahead for South Africa’s GDP
It is clear the South Africa is facing some challenges ahead, the economic data of the country is pointing to this.
The BETI (BankservAfrica Economic Transactions Index) index highlight another month of weaker activity. The has created doubt on the economic growth in the near future.
The economic index of BETI indicated an annual average 2% increase in growth however the 3rd Quarter saw these increases decline into negative growth.
The factors that added to the decline in GDP in South Africa were:
- Decline in rail services
- Water supply issues
- Supply chain problems
- and biggest of all, Loadshedding
- the rand to dollar exchange rate
- import pricing
- fuel price hikes
- general inflation
From the above it is very clear that interest rates aren't going to be moving in the near future and consumers must continue to practice prudence with spending.
Household credit has also eased with most components of credit slowing down, the only credit option that increased was credit cards. These figures are the lowest since 1st quarter of 2022.
All these indicators confirm that the economy is unlikely to gain much needed growth as consumers are now feeling the pinch the hardest in just over a year. There is also no clear indication of when these challenges will experience some respite.
The private sector has seen hundreds of businesses close sofar in 2023 simply because of all the economic constraints making it impossible for business owners to keep their doors open.
Frequently asked questions
How can I manage my budget better during tough economic times?
Here is a simple 5 step process to manage your budget:
- Understand the state of the economy as a whole
- Review your income sources (and the stability and continuity thereof in the near future).
- Review your expenses often to see where you are spending and potentially identify areas where you can cut, after all every little helps.
- Stabilise your finances by saving often
- Be prepared to have a flexible budget (fluctuations can often catch you off guard presenting challenges).
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