No change to the repo rate

Reserve Bank Governor Lesetja Kganyago has given the last repo rate announcement of the year and the rate has remained unchanged at 7% .

The year ends on a very interesting note. Local and international news was filled with shock and scandal, from Zuma and his allies being exposed in the State Capture report to the infamous business mogul Donald Trump winning the US presidency. Both events have played a very significant role in affecting the South African market.

Predicting the future of our economy at this juncture is not the easiest of tasks. The local markets in South Africa have suffered significantly as the price of fuel has been constantly rising in the last quarter of the year.

Head of Marketing at DebtBusters, Damon Sivitilli, has highlighted that more tough times are to come for most emerging markets, South Africa included.

The South African labour market has lost over 470 000 jobs in 2016, leaving these households in a worse off position. The credit providers have started tightening their belts in term of their lending structure. This was driven by the Credit Regulator, who penalised credit providers who lent recklessly to consumers.

This leaves consumers with very limited options in terms of borrowing to cover monthly expenses (pay-day loans). Only a select few will meet the criteria to borrow.

Sivitilli warns consumers of unscrupulous credit providers who are out to trap and confuse consumers because they are desperate. The recent scrapping of caps on interest rates and fees on short-term loans will certainly add to the difficulty. Sivitilli concludes that the economy is currently growing below projections and all South Africans need to be financially savvy with the income they get by creating realistic budgets and sticking to them.

Saving is not the easiest of tasks but starting small and being consistent will prevent many consumers from borrowing when they are faced with emergencies.