Sundaymail Editor
South African consumer confidence remained in the doldrums in the third quarter, weighed down by rising inflationary pressures and lending costs.
A quarterly index measuring sentiment rose to minus 20, from minus 25 in the previous three months, with the removal of all remaining coronavirus restrictions contributing to the marginal improvement, FirstRand Ltd’s First National Bank said in an emailed statement on Thursday.
The index has been negative for 13 straight quarters, the longest stretch since the series began in 1982.
“Consumer confidence in general remains very low and not conducive to healthy growth in real consumer spending,” FNB said.
“Mounting inflationary and interest-rate pressures, coupled with dismal consumer confidence, point to a significant deterioration” in spending, especially on durable goods, it said.
Sentiment improved most among low-income earners, mainly due to the government extending the payment of welfare grants and increasing the number of those who are eligible.
Meanwhile, South Africa’s current account balance dipped to a deficit of 1,3 percent of Gross Domestic Product (GDP) in the second quarter from a surplus of 2,4 percent of GDP in the first quarter, central bank data showed on Thursday.
In rand terms, the current account balance for the April-June period recorded a deficit of R87 billion from a surplus of R157 billion in the previous three months.
The trade surplus narrowed to R272 billion in the period from R372 billion in the previous quarter, as the value of both merchandise exports and imports increased further to all-time highs, the South African Reserve Bank said.
Data on Tuesday showed South Africa’s economy contracted back to pre-pandemic size in the second quarter, weakened by floods that disrupted operations at a key export hub and the country’s worst-ever power cuts. — Bloomberg.
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