Household Debt Crisis: Urgent Call for New Budget Survey

Jayen Chellum, Secretary-General of the Association of Consumers of Mauritius (ACIM), has called for a new Household Budget Survey in Mauritius. The last survey was conducted in 2017.

Chellum emphasised the need for updated data, especially considering the Covid-19 impact. He has highlighted the diverse financial situations of consumers, including those struggling financially.

Chellum has pointed out common loans like hire purchase, mortgages, and car loans, noting that many individuals face challenges in meeting repayment obligations. He insisted on the importance of financial planning before taking on debt.

Economist Manisha Dookhony underscored the significance of education in helping families manage their finances responsibly, particularly in light of rising loan costs due to increased key rates. Pierre Dinan, another economist indicated that household debt amounted to Rs 154 billion by the end of July, with Rs 108 billion tied to housing. He noted an increase in housing loans, reflecting a trend of young families investing in homeownership. However, he cautioned that high-interest rates and rising construction costs can impact economic stability.

Dinan urges caution in further increasing interest rates for housing loans, emphasising the significance of homeownership as a substantial investment. He also advised a review of consumption patterns, particularly regarding imports, to address their impact on the balance of payments and currency value.

Source: Defi Media