South African consumers have begun displaying a reluctance to take on more credit, a sign that the cumulative increases in interest rates since the end of 2021 have left them in a tight financial spot, according to a report by Nedbank. The JSE-listed lender’s group economic unit released its broad money supply report, which looks at money supply and credit behaviour in the country, on Monday. It shows that household credit growth eased to 6.5% in June, from 6.7% in May.
The Sarb’s aggressive inflation fight has made the cost of borrowing more expensive, which Nedbank says has impacted consumers’ ability to service both new and outstanding debt. Read:It’s not just the middle class, top 5% feeling debt pain too “Furthermore, weak growth prospects and the subdued labour market will contain income growth and depress consumer confidence,” according to the Nedbank report. Under the Household credit segment, home loans slowed to 5.
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