South African Consumer Confidence Rebounds to Pre-Pandemic Levels
TLDR
- South African consumer confidence reaches pre-pandemic levels in Q3 2021, driven by increased optimism.
- Consumer sentiment index improves to -5 in September, highest since early 2019.
- Positive factors such as broad governing coalition, improved electricity, lower inflation, and stronger rand contribute to higher confidence levels.
South African consumer confidence surged to pre-pandemic levels in the third quarter of the year, with increased optimism about personal finances driving the trend.
A quarterly index measuring consumer sentiment, compiled by FirstRand’s First National Bank and Stellenbosch University’s Bureau for Economic Research, improved to -5 in the three months ending September, up from -10 in the previous quarter. This marked the highest reading since early 2019.
Several positive developments have boosted the confidence of more affluent consumers, according to FNB Chief Economist Mamello Matikinca-Ngwenya, including the formation of a broad governing coalition after the May 29 elections, improved electricity supplies, lower inflation, and a stronger rand.
Key Takeaways
Investor sentiment strengthened after the African National Congress formed a coalition with centrist rivals, avoiding an alliance with the more left-leaning Economic Freedom Fighters. The rand has since stabilized at levels below 18 rand to the dollar. The survey's household finances sub-index rose to 14 from 8 in the previous quarter, signaling increased consumer willingness to spend, especially among higher-income households earning more than 20,000 rand per month. A change in law allowing early withdrawals from pension funds also contributed to financial confidence. The economic outlook sub-index also improved for the third consecutive quarter, amid slowing inflation, which is expected to lead to an interest rate cut by the South African Reserve Bank later this week.
Think someone else should see this?
To invest in this opportunity and other opportunities across Africa
Download the daba finance app on your mobile through
Take action.
Download app
Start investing in Africa’s best opportunities, including stocks, bonds, startups, venture funds, and more.
Partner with us
Unlock exciting business opportunities and growth potential.
Join Daba
Become a part of our vibrant community and enjoy exclusive benefits.
Contact us
Reach out to us for inquiries, support, or collaboration.