During the festive season, South Africa experienced a recognized decline in consumer confidence, marking its lowest point in two decades. This unsettling trend, revealed in a survey released on Thursday, is attributed to the nation grappling with elevated interest rates and a pervasive cost-of-living crisis.
The Consumer Confidence Index, supported by the First National Bank (FNB) and meticulously assembled by the Bureau for Economic Research, witnessed a decline to minus 17 points. This contrasted with the preceding quarter’s figure of minus 16 points, signifying a further downturn in consumer sentiment during the third quarter of 2023.
As evident from the overarching trends, consumers continued to exercise caution in their approach toward significant expenditures, particularly on interest-rate-sensitive items. Forecasts suggest a subdued performance in comparison to previous holiday seasons for these particular goods.
FNB Chief Economist Mamello Matikinca-Ngwenya observed that elevated interest rates and a notable decline in South Africa’s fiscal standing are causing concern among high- and middle-income consumers.
The most recent inflation data reveals that South African inflation exceeded expectations in October, reaching 5.9%. This acceleration can be attributed to substantial increases in food, transport, and health costs.