Askume, Sept 17 – South African consumer confidence rose to its best level since 2019 in the third quarter, driven by improved willingness to spend and expectations of an interest rate cut in September, survey data showed on Tuesday.
The Consumer Confidence Index (CCI) sponsored by First National Bank (FNB) and compiled by the Bureau of Economic Research (BER) fell from minus 10 points in the previous three months to minus 5 points this quarter.
FNB chief economist Mamelo Matikinka-Ngwenya said: “Over the past six months, a series of positive developments have boosted confidence levels among South Africa’s wealthier consumers.”
A Askume survey showed that the central bank will announce an interest rate decision on Thursday, with economists expecting the central bank to cut interest rates by 25 basis points if inflation slows .
Apart from slow inflation, the formation of a national unity government, the absence of load shedding, a strong rand and a sharp fall in fuel prices have also helped improve consumer confidence.
“In addition, the two-pot retirement system implemented on September 1 now allows consumers to withdraw part of their retirement savings, which will undoubtedly boost households facing financial difficulties,” Matikinka-Ngwenya said.
However, while confidence improved among higher and middle-income households, weakness was seen among lower-income households as a lack of retirement funds and debt linked to key rates outweighed the impact of two-pot policies and potential interest rate cuts.
