Whether you are looking at entering the market to buy property for sale in Carletonville, or pulling up to the petrol station to fill up your tank, the talk of the technical recession is doing the rounds and it does have an impact on your everyday life.
Many people don’t delve into what the recession is, or how it came about, but they know that it is going to have a negative impact on their financial situation. To assist, we look at exactly what the technical recession is, and the reason it is making an impact on you.
Firstly, the country moves into a technical recession after the economy suffers two consecutive quarters of negative growth. In September this year, Statistics South Africa revealed that there was negative growth in the first two quarters of the year, which signalled that there was a technical recession.
The Treasury had previously predicted 1.5% growth in the economy in 2018, but after the first two quarters this is unlikely to materialise, as at the start of the year the economy has been shrinking instead of growing.
In the property market, the weaker rand has a big impact as it makes it harder for people to get finance when they want to purchase property. First-time buyers are also heavily affected, as tighter finances lead to a lower affordability, and higher costs just pile on the pressure.
People have already been trying to deal with fuel prices that are soaring uncontrollably, while the VAT increase meant that almost everything started costing more, including monthly debt repayments.
With the information above, it is clear to see that recession will further impact household finances, and at present, you should be sure to carefully work your budget to ensure that you do not end up in a tricky situation.
