Trade union federations raise alarm over 'suffocation of economy'

The Reserve Bank has hiked the repo rate by 25 basis points to 3.75% meaning its now more expensive to borrow money.

FILE: Businesses have been under sever pressure since the COVID-19 outbreak touched our shores and there doesn't seem to be any break from the hardship on the horizon. Pixabay.com

CAPE TOWN - Trade union federations are raising the alarm over what they call the "suffocation of the economy" with high fuel prices, COVID-19, devastating rolling blackouts, job losses and salary cuts and most recently. The increase in the repo rate.

The Reserve Bank has hiked the repo rate by 25 basis points to 3.75% - meaning it's now more expensive to borrow money.

Earlier this month, the price of petrol and diesel increased by more than R1 at a time when frustrated motorists are having to spend longer in traffic due to Eskom turning off our power.

Businesses have been under sever pressure since the COVID-19 outbreak touched our shores and there doesn't seem to be any break from the hardship on the horizon.

They're still paying off debt from the impact of the lockdown restrictions and are now having to absorb the shock of rolling blackouts, exorbitant fuel prices and devastating salary cuts.

Cosatu's Sizwe Pamla said Thursday's decision to increase the repo rate - making it more expensive to borrow money from a bank - could not be explained.

"Because one would have hoped that all of this, the Reserve Bank is aware of and now you are going to force them to spend more than they were spending before. We cannot see why they decided to do this at this time."

Saftu, meanwhile, is also deeply worried.

Its workers are rejecting what they call a "higher interest regime".

They said it will only slow down the pace of economic recovery and growth, which should be massively concerning to all South Africans.