You may have heard numerous stories on how the technical recession can impact you, from buying property for sale on the East Rand to how it will impact on your monthly grocery budget. Often, this casual passing of information can make you quite concerned, but if you have heard about the recession and want some of the important facts, this article will assist.
Firstly, it is important to understand how a technical recession comes about. This happens after the economy has gone through two consecutive periods of negative growth. This has indeed happened in South Africa, with Statistics SA revealing the performance of the economy in the first two quarters of the year.
The Treasury had previously anticipated a 1.5% growth in the economy over the course of 2018, but considering the 2.6% and 0.7% contraction over the initial quarters, this does not seem to be a likely possibility at present.
Also, although you may pin a lot of current financial difficulties on this, it is important to remember that there have been a number of financial low points in 2018, and it takes a little time for you to feel the full impact.
Petrol prices have been running away over the course of the year, and this can impact your monthly budget not only in regards to travel, but also when it comes to food prices and similar. There was also the ‘small’ issue of the VAT increase, which basically raised the prices of everything.
The most important thing to keep in mind during these tough times is that you need to stay on top of your budget. Taking on a lot of debt or over-spending can easily lead you into bad debt and have a major impact on your personal finances.
