daniel chigunwe
A South African consumer confidence gauge reached its best festive-season level since 2019, before the coronavirus pandemic struck, signalling spending is likely to be sustained as the year closes out.
The index fell slightly to -6 in the three months through December from -5 in the previous quarter, but was still an improvement on the -17 reading a year earlier, FirstRand’s First National Bank said in an emailed statement on Wednesday.
That marks an upturn in consumers’ willingness to shop during the holiday season, the lender said.
Consumer confidence among highly paid individuals improved the most, while it fell among middle-income earners and was unchanged among those in the low-income bracket.
The overall slip in the index can be attributed to a marginal deterioration in perceptions about the economy and household finances, FNB said.
Sub-indexes measuring the economic outlook and household finances dropped to -9 from -7 and to 11 from 14 respectively, according to the survey.
“A string of favourable developments has seen consumer confidence riding much higher since the second quarter of 2024, including the formation of a government of national unity,” the termination of power cuts and cooling inflation, Mamello Matikinca-Ngwenya, chief economist at FNB said.
“However, headwinds started to emerge in November, arresting the upward trajectory of consumer confidence.”
The rand has fallen more than 4 percent against the dollar since the US election on November 5, as investors bet Donald Trump’s pledge to raise tariffs and cut taxes will prompt the Federal Reserve to lower rates less than it had forecast, boosting the US currency. Those risks prompted South Africa’s central bank to exercise caution in lowering borrowing costs last month — it cut the key rate by a quarter point to 7,75 percent . — Bloomberg
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