SA economy | Consumers relying on credit to get by

JOHANNESBURG - Consumers are using short-term credit to afford higher prices and this may constrain spending in the months ahead.

The TransUnion SA Consumer-Credit Index fell the most on record in the second quarter.

It went to 49 from a final reading of 55 in the first quarter of the year.

READ: National Credit Regulator urges people to keep good credit

The drop brings the index to its lowest level since the third quarter of 2020.

The index shows that household cash flow is under pressure, with prices of goods rising more than income.

READ: SA economy | Credit demand grows in May

This suggests that real purchasing power is being limited.

Without increased household income, the index is likely to deteriorate further.

But Absa's Isana Cordier says the pressures won't stop consumers from spending on Black Friday and during the festive season.