What a year…
Looking into the rear view mirror back at 2022, the disrupted global economy has left us with many financial challenges which we will have to carry through to next year. They certainly won’t be going away for a while.
The 3 big ones to contend with are:
The price of oil
The war on Ukraine created a huge supply problem on oil. This quickly played through to a 34% price increase at the pump hiking a litre of petrol to the all time high of R24.
The knock on effect of this imported commodity lead to another challenge:
Raging inflation
As fuel is a major cost component in most businesses this had to translate into higher prices. Inflation in the mid 7% is ravaging its way through our economy and is stubbornly well outside the Reserve Bank target range of below 6%.
The main component in the basket of goods making up the CPI Index if food inflation which is now double digit. This is evident as you browse the shelves of you local supermarket where prices seem to rise daily.
Curtailing inflation is difficult and the first measure of resort is to curb spending.
The sharp rise in interest rates
The Reserve Bank did what it had too and increased interest rates sharply to put the brake on inflation. This hurt the consumer even more with the consequential cost of debt.
2022 is leaving us with many other huge problems such as load shedding and a looming water crisis amongst many other delivery problems.
Your financial planning will have to be on point to get through these challenges. 2023 calls for super extra attention to detail on your income and expenses. Capitulation to debt is not an option. Hold on tightly as the end of the storm is no where in sight as yet.