The value of civil judgements for debt declined by 20,5% year-on-year (y/y) in June to R541,8-million, Statistics South Africa said on Thursday.
This compares with a 6,6% y/y drop in May to R526,5-million and December’s phenomenally high 64,5% y/y increase to R840,8-million.
The number of judgements fell by 29,3% y/y in June to 74 624, while the number of summonses issued dropped by 25,4% y/y in June to 112 959.
This meant that the value of judgements for the first half was down 4,5% y/y, while the number of judgements fell by 14,4% y/y and the number of summonses issued dropped by 13,2% y/y over the same period.
The increase for all of 2003 had only been 9,1% in the value of civil judgements, while the number of judgements rose by 11,2% and the number of summonses edged up by 1,4%.
In 2002 there was an 18,7% drop in the value of civil judgements for debt to R7,446-billion.
During 2002, consumers reduced their debt load so that in the fourth quarter the household debt to disposable income ratio dropped to 50,7%, its lowest level since 1992, from 54,7% in the fourth quarter of 2001. The ratio peaked at a record annual level of 60,6% in 1997.
The five cuts in interest rates in 2003 after four hikes in 2002 meant that consumers were prepared to take on more debt in 2003 and the ratio rose to 53,6% in the third quarter of 2003 from 52,8% in the second quarter of 2003, but then eased back to 52,4% in the fourth quarter of 2003 before rising again to 54% in the first quarter of 2004.
On August 12 2004, the South African Reserve bank announced a further 50 basis-point cut. — I-Net Bridge