Downgrades will hike interest rates making it difficult for you to repay debt

Chris Gilmour, ‎Investment Analyst at Absa Wealth & Investment Management, says a rise in interest rates caused by the latest credit ratings downgrade will mean little wage increase in the future, comprising debt.

We [ the country] are still going to be able to repay our debts with relative ease although having said that it is going to become more difficult.

Chris Gilmour, ‎Investment Analyst at Absa Wealth & Investment Management

If you look at Pravin Gordhan's last budget, he made it clear how much we have to pay just on interest in government debt and it’s something like R140 billion a year and so that will now get bigger and bigger.

Chris Gilmour, ‎Investment Analyst at Absa Wealth & Investment Management

Once government bond yields go up then interest rates generally in the country tend to go up as well, so people will pay more on their credit.

Chris Gilmour, ‎Investment Analyst at Absa Wealth & Investment Management

Listen to the full interview below...

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