Consumers’ pockets will remain constrained in the coming quarters given persistent core inflation pressures and the anticipated further interest rate hike by the SA Reserve Bank (SARB) in January, according to Momentum Investment’s Consumer pulse.
The SARB was expected to hike the repo rate in an attempt to anchor inflation, with expectations at the mid-point of the target range.
Momentum Investment said higher interest rates would further decrease consumers’ disposable income as more money needs to be allocated toward debt financing.
The report also revealed that the TransUnion SA Consumer Credit Index fell by 1 point to 48 in the third quarter of 2022, below the 50-point neutral level, indicating a moderate deterioration in the fragility of consumers’ balance sheets.
