Recession not over for average consumer

2009-12-17 10:25

WHILE South Africa may be technically out of the 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 3% to 6% inflation target range,

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 9 000 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 this year

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.

He advised consumers to continue to spend conservatively.

“Should you find yourself in debt, research the options that are

available to you.

“Consumers should actively begin a debt repayment plan.”

Hirst said consumers should consult a registered debt counsellor if

they had any concerns about their financial situation.

“South Africans under debt review need to realise that they have

been thrown a lifeline. By agreeing to pay a reasonable amount each month you

can avoid repossession of assets and legal proceedings,” he said.


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