Monday

An overview of debt conditions in South Africa

Post a Comment January 17, 2011 – 11:36 am |   | Permalink |  Print This Post |

Debt conditions in South Africa have been hit a lot. The conditions are getting worse to worst so much that many of the companies have sold their shares and bonds to pay off the debt. More and more South Africans are trying to consolidate debt with the help of debt consolidation loans to get out of debt and big companies are selling off their bonds to meet their debt payments.

Sharp decline in economy in South Africa

The economic conditions fell into recession and the Gross Domestic Product (GDP) contracted by 1.8 % in 2009. From then and till the end of 2010, the economic conditions haven’t improved much. It was expected that recession would drop in 2010 but it’s almost the same. This was due to the falling domestic demand and also a decline in export. Even with the FIFA World Cup in 2010, the growth was not affected much. But it’s predicted that in 2011 the economic growth will increase 3.3 %. The country is still in debt and a lot of companies who are in business with the country are not getting the required revenue.

Decline in civil debt judgments

A lot of civil judgments have been dropped in the third quarter in 2010. The last quarter saw a 9.5 % drop in the civil summonses for debt as compared to the third quarter in 2009. Debt issued in September was up 2.2 % year by year whereas the value of the judgment was down by 6.9 % which is R595 million. The first quarter saw a decrease in the debt to income ratio. The ratio of household debt to disposable income came down to 78.4 % whereas in fourth quarter in 2009 the ratio was 79.9 %.

Apart from all these problems, it’s hoped that South Africa will emerge out of debt.