Times Live :

Next month’s decision on interest rates will be a tough one for the Reserve Bank’s monetary policy committee.

With inflation less of a concern now, more calls can be expected for a rate cut.

Civil debt figures released by Stats SA on Thursday show consumers are still highly indebted, and are experiencing a high degree of financial vulnerability.

The figures show the private sector is still struggling with debt repayments, with individuals making up 92% of the judgments and business enterprises just 8%.

These figures come after Stats SA reported that the number of civil judgments recorded for debt in April had increased 11.6% year–on-year, bucking the single-digit growth trend evident earlier this year

“The risk is that with civil judgments and summonses issued still positive and rising, households could see further instability on their balance sheets, unless economic recovery, employment creation and real income growth deepen sustainably,” said Investec chief economist Annabel Bishop.

And even though retail sales to April were shown to have grown by 3.2% from 2.7% – it was not long ago that 14 negative readings in a row were recorded – Bishop is still expecting the weaker backdrop provided by other statistics to lead to a 50 basis-point interest rate cut this year.

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