South Africa: start saving!

13 November 2008

The South African Savings Institute has launched a campaign to encourage South Africans, hit by an economic slowdown and high interest rates amid a global finance crisis, to save money and spend more responsibly.

South Africa’s saving rate dropped from 2.7% in 2001 to a negative rating of -0.5% in the second quarter of 2008, the institute said in a statement on Tuesday.

“Clearly this is picture is unsustainable.”

On top of this, South Africans had over the past few months seen interests rates increase to 12%, inflation peak at 13.40%, and the stock market decline by 30.13% year-on-year. Official unemployment figures stood at 23.2% for the 3rd quarter or 2008, and economic growth is forecast to slow to 3.3% in 2008 and 3% in 2009.

“However, what is clear from all these negative indicators is that those people who put money aside are well prepared to rise above the current economic storm,” the institute said.

“Those who have not saved sufficiently are really feeling the pinch – an important lesson for all of us.”

The institute said South Africans needed to take special care not to overspend during the coming festive period. “Consumers need to be conscious of the need to save, and ignore the ‘Sale’ signs, as New Year obligations include school fees for many parents.”

Partnering the South African Savings Institute in the campaign are the Department of Trade and Industry, the Financial Services Board, the National Credit Regulator, the Council for Medical Schemes, and consumer affairs provincial offices.

“The DTI wants to make sure that South Africans are armed with all information they need in order to make informed decisions,” said DTI director for consumer affairs Karin Coode. “This includes spending wisely over the festive season and being careful about borrowing money.”

SAinfo reporter

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