SA's mounting financial pressure signals risk of economic recession: Economist

Chief economist at STANLIB, Kevin Lings was reacting to record-high fuel prices announced on Monday.

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JOHANNESBURG - The risk of an economic recession has doubled as South Africans face mounting financial pressure.

This is the view of the chief economist at STANLIB, Kevin Lings.

He was reacting to record-high fuel prices announced on Monday.

Lings believes the financial pressures consumers are faced with are likely to plunge the country's economy into recession.

"It can start to compound as these pressures mount and I think we are in that type of environment because, on its own, we were just talking about this petrol price hike. On its own, it would be a significant shock but put it all together the psychology around load shedding, petrol for individuals, service delivery, and water outages.

"It all just weighs on psychology and people make decisions around spending money and taking on credit. That definitely can push an overall economy into recession."

Motorists will pay more at the pumps for petrol and diesel from Wednesday, with the fuel price changes expected to have a dire impact on the cost of living.

Petrol 93 octane is expected to cost an additional R2.37 per litre while 95 octane will cost an additional R2.57 per litre.

The price of diesel is also set to increase by between R2.30 and R2.31 per litre.