S. Africa consumer confidence recovers to pre-pandemic levels, survey shows
4:05 am Tuesday, September 17th, 2024
(Reuters) – South Africa’s consumer confidence recovered further in the third quarter to its best since 2019, helped by improved willingness to spend and hopes of an interest rate cut in September, survey data released on Tuesday showed.
The consumer confidence index (CCI), sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research (BER), improved to minus 5 points in the quarter from minus 10 in the previous three months.
“A confluence of positive developments has bolstered the confidence levels of South Africa’s more affluent consumers over the last six months,” FNB Chief Economist Mamello Matikinca-Ngwenya said.
The central bank is due to announce its rate decision on Thursday, with economists expecting a 25-basis-point cut as inflation slows, according to a Reuters poll.
Besides the deceleration in inflation, the formation of the government of national unity, the absence of load-shedding, a stronger rand exchange rate and substantial fuel price declines have also contributed to improving consumer confidence.
“Moreover, the implementation of the two-pot retirement system on Sept. 1 now allows consumers access to a portion of their retirement savings, which will no doubt hearten households experiencing financial distress,” Matikinca-Ngwenya said.
However, while confidence among high-income and middle-income households improved, low-income households showed weakness as the lack of pension funds and debt that is tied to the prime interest rate minimizes the impact of the two-pot policy and possible rate cuts.
(Reporting by Prerna Bedi in Bengaluru; Editing by Savio D’Souza)
