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Experts are already warning of a rocky 2017 in the South African Economy. What ‘f-words’ do you need to know to get you through this year?
After a somewhat tumultuous 2016 in the South African economy, experts are having some mixed feelings for 2017. Although they are expecting a quiet start to the year, the economy is marked to slump in the second half of the year. These shake-ups are pinned largely on the ANC elective conference that will take place later in the year. To put it lightly, experts are not expecting things to go well and are warning South African’s to brace for a few shocks.
The Four Biggest Financial F-Words In SA In 2017
To prepare you financially to get through it unscathed, here are a few financial F-Words to remember.1. Fiscal Status
The first aspect to cover is the vital aspect of the economy during the course of the year. The fiscal status refers to the overall public revenue and includes public spending and debt. Although the status for the beginning of the year is expected to be relatively stable, the long term picture is not as bright. As the national debt levels increase, medium-term risks are mounting. Despite the National Treasury remaining hopeful for a recovery, it seems unlikely. It is expected that fiscal consolidation and debt stabilisation will stall, despite attempts to aid fiscal sustainability.2. Food Inflation
Food inflation refers to the increase in wholesale prices of food. This will have a direct impact on the consumer. It essentially determines whether the average South African will have enough to eat, or whether most will go hungry. Currently, food inflation is sitting at around 11.5%, and in twelve months time, looks like it might drop to 10.4%. After facing a crippling drought over the last few months, consumers have faced some of the highest food prices in years. There is expected, however, that cash-strapped consumers can look forward to some relief.CLICK BELOW to chat to a professional debt expert about overcoming your debt in 2017!
3. Forecasts
The forecasts for growth and interest rate cuts are somewhat grim. Growth is expected to be slow. Showing little, if any potential. The predicted GDP growth for 2017 is sitting at a tragic 1%. This could be blamed on the expectations of political instability and flare-ups. Interest rates are expected to not be cut at all during 2017. With the expected deterioration of the Rand, the expectation of a rate hike is rather moderate to high.4. Financial Capability
Financial capability refers to the understanding and financial behaviour of consumers. This refers to the levels of cash management, indebtedness, and saving behaviours. It also includes their ability to adapt to new financial situations. The picture of South African financial capability is bleak, to say the least. Total consumer debt now stands at close to R1.6 trillion in South Africa, with household debt sitting at around 78% of household income. With inflation sitting at 11.5%, experts are warning consumers to start cutting down on excessive spending. With these levels of indebtedness, many consumers are being prompted to seek debt counselling. Due to real incomes being in decline for the last three years, the BankservAfrica Economic Transaction Index (Beti) report paints a worrying picture. It claims that SA is already in a per capita recession, due to economic growth being slower than population growth.