Financial woes

2018-10-16 06:02

IN early September, South Africans were left in a state of shock when Statistics SA revealed that the country had entered a technical recession.

This was due to the country’s real gross domestic product (GDP) declining by 0.7% in the second quarter of the year. During the first quarter, the GDP also declined by 2.2%. According to Statssa, a technical recession is two (or more) consecutive quarters of negative growth.

This announcement marked South Africa’s first recession since the 2008 global financial crisis, which saw three consecutive quarters of economic decline.

According to the Statssa report, industries that contributed to the contraction were agriculture, transport, trade, government, and manufacturing.

To add to the grim state of things, not even a month later, the Automobile Association warned fuel users that a fuel hike described as “catastrophic” was on the cards for October. The Department of Energy (DoE) then announced last week that fuel price increased to its most expensive amount yet. Both grades of petrol (93 — ULP and 95 — LRP) increased by 99c and 100c (one rand) per litre. Diesel 0.05% sulphur and diesel 0.005% sulphur both increased by 124c (R1.24) a litre. Illuminating paraffin (wholesale) increased by 104c (R1.04), while illuminating paraffin (SMNRP) increased by 139c (R1.39) per litre. The maximum retail price for LPGAS has increased by 179c (R1.79) per kilogram.

The double blow has everyone, right down to the commoner, living in perpetual fear of sinking into debt.

One troubled resident, Nimla Puckree, said: “I am sick to the stomach in apprehension of making ends meet. Added to the crippling state of unemployment, there seems very little light at the end of the tunnel for South Africans. If ones who are gainfully employed are having a hard time, imagine the struggle of the poor, the elderly, and the one or no parent homes. It’s very bleak and people are in dire straits.”

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