Cost of living crisis ‘robbed’ South Africans, says CEO

 ·19 Jan 2025

Debt Rescue CEO Neil Roets says that the past festive season, usually meant for joy and celebration, has revealed a stark reality: the cost-of-living crisis is robbing simple pleasures.

According to the firm, as households grapple with escalating expenses, 68% of South Africans have admitted they did not travel this holiday season.

For 62% of them, soaring fuel prices have rendered even a short trip an unattainable luxury. What should’ve been a time of joy instead became a time of sacrifice.

Roets recently shared the findings of Debt Rescue’s latest Festive Season Survey.

This survey reveals a sobering picture of consumer spending patterns amid the country’s ongoing economic challenges.

It’s not just data; these numbers reflect the lived realities of millions of South Africans facing tough financial decisions.

According to the survey, a staggering 71% of respondents indicated they would forgo Christmas gift-giving altogether.

This beloved tradition, which embodies the spirit of generosity and connection, has become a casualty of the economic hardships gripping the nation.

“When the majority of the nation is unable to afford to exchange gifts during this season of giving, we need to sit up and take notice,” said Roets.

This shift away from long-held traditions highlights the depth of the financial struggles many are experiencing.

High inflation and persistently elevated interest rates have been identified as primary culprits.

About 57% of respondents cited these factors as the reason for their reduced spending. With consumer prices stretching already-thin budgets, many are being forced to rethink every purchase.

In fact, 66% of South Africans say they will actively seek out the cheapest options for essentials like food, clothing, toiletries, and gifts, while 56% plan to cut back on purchases entirely.

Debt Rescue CEO Neil Roets

Additionally, 51% of consumers are opting to pay with cash, a strategy aimed at avoiding debt in an environment where borrowing costs remain high.

The struggle extends to one of the most basic and cherished aspects of the festive season: the family meal.

For nearly half of South African households, even a modest celebration with wholesome food shared among loved ones became a rare luxury as food prices continued to climb.

This loss of simple joys underscores the emotional and social toll the financial pressures of 2024 took on the nation.

However, the broader economic picture reveals some glimmers of hope.

According to TransUnion’s Q3 2024 South Africa Industry Insights Report, 5% of consumers reported that their household income is failing to keep pace with inflation.

Despite this, inflation has shown signs of easing, dropping to 2.9% in November 2024. This is below the South African Reserve Bank’s mid-point target of 4.5% and marks a significant improvement from earlier in the year.

The decline in inflation increases the likelihood of further interest rate cuts in 2025, following the 50 basis points of cumulative cuts implemented in 2024.

The prospect of lower interest rates offers a glimmer of relief for many South Africans, potentially easing borrowing costs and reducing the financial strain on households.

However, for now, the impact of these improvements has yet to filter down meaningfully to consumers, leaving many struggling to maintain their standard of living.

This festive season’s sombre tone underscores a harsh truth: the cost of living crisis is eroding traditions that bring meaning and joy to life.

The vibrant spirit of giving and togetherness, once synonymous with the holidays, is being replaced by a collective struggle to make ends meet, said Roets.

While the economic indicators suggest that relief may be on the horizon, for millions of South Africans, the festive season was a stark reminder of the sacrifices required to navigate these challenging times.


Read: What to expect from interest rates in South Africa this month

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