Junk Status: Impact on Consumers

[VIEW IN YOUR BROWSER](#) EDITION 4 [hellopeter.com]( [Hello December!] Hey! We just wanted to pop-in and wish you an awesome December! We are incredibly grateful for your support, none of this would be possible without you, our community. Don’t forget to check reviews about businesses you may be using to ensure they deliver on their promises. And if they aren’t there, leave a review afterwards to let the rest of the community know about your experience. Keep reviewing, keep sharing, keep helping each other! See you in the New Year! Love, Team HP [Junk Status] Junk Status: The impact on consumers Fitch Ratings agency recently downgraded the country's long-term debt to junk status, with Standard & Poor doing the same the next day and Moody placing us on review for a downgrade. We know it's bad news, but how bad is this for the ordinary consumer? Although we will not feel the impact of the downgrade immediately, the experts agree that we can expect: - Price increases, - More expensive credit, - Increased taxes, - Pressure on service delivery and - International funds taking their money out of SA. The downgrade indicates that rating agencies believe there is an increased risk that government will not repay its debts. The price of credit for the country increases and more expensive debt means less money for services like social grants. The rules of international bond funds force them to withdraw their investments when a country is downgraded to junk status to shield their shareholders from excessive risk, leading to large amounts of money leaving the country. Pressure on the Rand will increase and imported goods, such as fuel, will cost more, making it necessary for businesses to cut jobs. In short, less people with money and less people paying taxes. Price increases usually cause an increase in the inflation rate, forcing the SA Reserve Bank to increase interest rates, making credit more expensive. Consumers will be required to pay more tax to fund government’s increasing debt burden and fill the gap left by tax payers who are no longer employed. Without enough money to fund its debt repayments, government might have to cut social grants and other services for the poor. The effects of the downgrade do not paint a pretty picture for South African consumers. However, while government and politics are responsible for the downgrades, it is up to US to decide how we are going to survive. Saving and spending wisely will help US get through this downgrade. [Facebook]( [LinkedIn]( [Twitter]( Hellopeter and the author accept no responsibility for the incorrect interpretation or actions of any reader relating to the publication. All actions taken by any reader due to the publication are done on their own accord. [View in your browser]( | [Forward to a friend]( | [Unsubscribe](