The CFVI is a measure of our perception of our cash flow, buying power and general financial position as consumers, and this perception is continually affected by our changing economic environment.
In South Africa, the CFVI fell from 51.4 in the third quarter of 2014 to 51.2 points in the fourth.
What Factors Affect The CFVI?
The latest CFVI revealed an improvement in the levels of optimism among consumers from the last quarter, owing in part to the R4 drop in petrol prices from August 2014, caused by oil prices falling from $112 to $50 a barrel. However, this relief was only momentary, as petrol prices increased by R1.62 per litre from last month, due to international oil prices bouncing back to $64/barrel.
Other factors that have diminished the CFVI include the weak exchange rate, electricity tariff hikes, recent tax adjustments, high unemployment and the possibility of interest rates rising.
Overall, the CFVI continues to show that our greatest concern as consumers remains that of servicing our debts, and that we are feeling very exposed with regard to our income, expenditure and savings.
How Can I Improve My Financial Position?
Interest rates aren’t expected to change, after the last increase of 25 basis points in July, while inflation has remained stable at around 4%, which is encouraging in light of last year’s inflation rate of 6.1%.
Accordingly, this should be viewed as an opportunity to seize the day and catch up on outstanding debts, instead of slipping back into overspending complacency – the bad habit that lands ‘credit-drunk’ individuals in hot water in the first place.
Now is the time to take advantage of any last remaining trace of economic reprieve by speaking to National Debt Advisors, so we can help you settle your debts, before inflation picks up again and your state of indebtedness deepens to the point of no return.