Latest news with #R178
The Citizen
23-05-2025
- Business
- The Citizen
R466bn ‘hit' as National Treasury lowers SA GDP forecast
'This is the main contributor to the projected increase in the country's debt-to-GDP ratio' – DG Duncan Pieterse. South Africa's National Treasury has lowered its GDP growth forecast for the country (to 1.4%) for 2025, as well as for the next two years (1.6% in 2026 and 1.8% in 2027), in the wake of 'international trade volatility and policy uncertainty' due to US President Donald Trump's tariffs and the resultant threat of a global trade war. The slower growth over the next three years is expected to have a R466 billion 'hit' on the SA economy, Director-General (DG) of the Treasury Duncan Pieterse confirmed in response to questions during a Budget 3.0 media Q&A session on Wednesday. In the March budget, Treasury forecast 1.9% GDP growth for 2025, 1.7% for 2026, and 1.9% for 2027. However, it had to revise this downwards in the latest budget. Facing questions about SA's 'weaker fiscal position' reflected in the country's higher debt-to-GDP forecast of 77.4% in Budget 3.0 (up from 76.2% in the March budget), Pieterse said the downward revision in economic growth 'is what's driving' the increase in debt-to-GDP projections over the next three years, not higher government debt levels or significant increases in spending. ALSO READ: Sensible or underwhelming? Economists react to Godongwana's Budget 3.0 He said that due to the revision of the economic outlook, SA is now forecast to see 'a R130 billion movement' in nominal GDP growth for 2025 – essentially less-than-expected growth. 'In 2026/27, the impact would be around R161 billion, and in 2027/28, around R178 billion … The cumulative effect [of the lower GDP growth] is some R466 billion,' Pieterse later added. 'Included in this is the fact that we ended up with lower-than-expected GDP growth in the last quarter of 2024 [0.6%, instead of the forecast 0.8%]. Remember that the Q4 2024 GDP outcome was not included in the March budget [it was not released at the time],' he explained. Source: National Treasury Pieterse said the lower GDP growth forecast effectively 'pushed up the debt-to-GDP' or debt as a percentage of GDP metric. 'However, for us, the de facto fiscal anchor is the primary surplus … And that is getting better. We believe our fiscal objectives are on track,' he said, echoing Finance Minister Enoch Godongwana. ALSO READ: Budget 3.0 was not a chainsaw budget, economists say Pieterse stressed that more focus should be placed on SA's primary surplus and the fact that the forecast budget deficit as a percentage of GDP was still 'intact' at 4.6% for 2025/26. 'As global growth has faltered, South Africa's economic outlook has also weakened, with GDP expected to grow by only 1.4% in 2025. Global risk and economic weakness reinforce the need for us to put our fiscal house in order,' he said in the foreword of the latest Budget Review, tabled with other budget documents in parliament on Wednesday. 'The fiscal strategy remains on course so that government can spend less on debt-service costs and more on critical public services. As per our commitment, government debt will stabilise in 2025/26 at 77.4% of GDP. For the first time since the 2000s, government is consistently running a primary surplus, where revenue exceeds non-interest expenditure,' Pieterse added. This article was republished from Moneyweb. Read the original here.
The Citizen
17-05-2025
- Automotive
- The Citizen
Is it still worth buying a car?
You can even buy a car online and have it delivered to your house. The question is if you really still need a car in 2025. Our lives have changed significantly in the past few years. We can work remotely, shop remotely and bank remotely. Apart from going on holiday and taking the children to school, most of us could almost get along without owning a car. Is it then still worth it to buy one? We live in an era of ride-sharing apps, remote work and growing environmental concerns, which makes the once-straightforward decision to buy a car trickier than parallel parking in peak traffic, Cheslyn Jacobs, chief commercial officer at TymeBank, says. 'Across South Africa, new and used cars sport price tags that have many consumers questioning whether the traditional milestone of car ownership is still attainable and, more importantly, if it makes financial and practical sense.' ALSO READ: Buying a car? Keep this in mind Car ownership: status symbol or financial strain? Jacobs points out that the cheapest entry-level new car in today's market starts at approximately R178 000. 'The numbers are not encouraging. Yet, even with rising interest rates and fuel prices, the long-held aspiration of owning a vehicle remains a compelling choice for many. And it is about more than getting from point A to point B. 'Let's be honest. South Africans are often not the pragmatic type when it comes to buying a car. We all want to make a statement of our personality, our financial might or our social status. We want to rev our new cars or dominate suburbia with our 4x4s.' However, he says, to show financial maturity, you must buy a car with your head, not your heart. 'Your choice of transport should be dictated by your needs. Ask yourself: how far do you drive every day? Do you drive on highways, suburban streets or gravel roads? Do you expect to grow your family in the next few years? 'These questions will help you pick a car that matches your lifestyle – if you need one at all.' ALSO READ: Here's why you should – and why you shouldn't – buy a new car If you do need a car, what are your options? Jacobs says if your lifestyle demands that you have a car, the general rule is that you should not spend more than 20% of your total income on car repayments. 'For buyers unable to pay cash there are several financing options, each with distinct advantages (and disadvantages). Vehicle asset finance that some banks and dealerships offer typically provides competitive rates since the car serves as collateral. 'If you have an existing home loan you could consider accessing your home equity to potentially benefit from even lower interest rates. Personal loans also offer flexibility and the ability to buy from private sellers but usually carry higher interest rates.' Jacobs emphasises how important it is to understand these terms and conditions of each option to ensure you make an informed decision: ALSO READ: Need a new car? These are the payment options available to you Paying with vehicle asset finance Understand the terms and cost of the loan. The car may be priced at R100 000 but that number increases exponentially, depending on your interest rate. Understand what happens if you fail to repay your loan. The car belongs to the bank/financing house until you have paid it off in full. Remember to factor in car insurance, as most lenders require comprehensive insurance for the duration of the loan. This protects you as well as the lender in case of accidents or theft. Consider saving for a large deposit to reduce the monthly repayment costs. Be wary of balloon payments due to the large fees payable at the end of your term. ALSO READ: 1.9 million people qualify for car financing but do not use it Paying for your car through home loan financing This option requires careful consideration, as adding car debt to your home loan means your home serves as collateral for both loans. Another consideration is the impact it will have on your home equity. Using your home loan to finance a car reduces the equity in your home. This can affect your ability to borrow against your home in the future and may affect your financial flexibility. Finally, if you decide to use your home loan to finance your new car, it is wise to aim to repay the loan within 48 months to minimise the interest costs and ensure you do not extend the debt over a longer period, which could affect your financial stability. ALSO READ: What you need to know about personal loans Paying for your new wheels through a personal loan Before taking out a personal loan for a car, there are several critical steps you should take: Shop around for the best loan terms by getting quotes from multiple banks and lenders. Compare loan fees, interest rates and monthly payments. Calculate what percentage of your monthly income would go to car expenses. Financial experts recommend keeping total car payment costs under 15-20% of your take-home pay. Consider certified pre-owned cars which often cost less. Research the best time of year to buy when dealers offer discounts. 'Before diving in headfirst, first make sure you are financially ready. This includes reviewing your credit score and report before applying for finance, addressing any credit issues that could lead to higher interest rates, calculating your debt-to-income ratio to ensure you qualify and building up an emergency fund before taking on car payments.' Jacobs warns that you must ensure that you completely understand the expenses involved, including insurance, service and unexpected repairs. 'Finally, you must consider the impact of a car loan on your other financial goals, such as further education or pursuing that dream of overseas travel.'
