SA’s consumer credit shows 8.3% decline

CONSUMER credit in South Africa eased 8.3 percent in the first quarter, before fuel price increases hit their pockets in April.

The TransUnion Consumer Credit Index (CCI) yesterday said that the number of accounts in 3-months in arrears fell from around 890 000 to 816 000 in the year to March 2018, a drop of 8.3 percent. The CCI measures borrowing and repayment activity across more than 20 million individual borrowers and nearly 53 million credit accounts.

TransUnion said the improvement came amid a surge in consumer confidence in the quarter and improved business confidence. TransUnion Africa regional vice president Stephen de Blanche said the recent hikes in fuel prices would, however, dampen consumers appetite for spending.

“Petrol prices have risen sharply in recent months and the trend of rand strength is less… Household cash flow only turned marginally positive in the first quarter, so it is still vulnerable to macroeconomic pressures and vigilance should remain the order of the day,” De Blanche said.

Consumer confidence in South Africa surged to an alltime high in the first quarter of the year. The First National Bank/Bureau for Economic Research (BER) consumer confidence sentiment index raced to 26 points in the first quarter of 2018 from -8 points in last year’s fourth quarter.

The increase is the largest single quarter improvement since BER started publishing its composite index in 1992.

The increase is the largest single quarter improvement since BER started publishing a composite index in 1982. It also dwarfed the previous record high of 23 index points reached in the first quarter of 2007.

Andre Venter, spokesperson of the trade union Uasa said: “Since it is the poor who suffer most as a result of the price increases, maybe it is time the government looked at how local fuel prices are calculated, and whether some of the local additions’ income could be sourced from elsewhere”.