Consumer Confidence In South Africa Improves

 Consumer Confidence In South Africa Improves

Consumer Confidence In South Africa Improves During Q3

The results from the latest survey reveal that consumer confidence in South Africa has improved during Q3 2023. This is mainly driven by the economic improvement and an uptick in the consumer spending.

The index that measures consumer confidence is issued by the FNB and is closely watched by investors. In Q2 2023, the index value was -25, which improved to -16 in Q3 2023. Although consumer confidence is still in the negative, it has started to show signs of improvement.

In the African continent, South Africa is the 3rd biggest economy and thus is considered a barometer to understand the economic situation of Africa. Some of the biggest challenges faced by South Africa include rand depreciation, high-interest rates, and increased frequency of power outages.

CPI Inflation Down To 4.7%

During Q2, the consumer confidence index touched new lows and thus raised fears across the stakeholders. But in Q3, consumer confidence has made a remarkable comeback as households are now more willing to spend money.

Despite the recent improvement, the economic progress in South Africa still remains weak. However, the condition has improved somewhat as the consumers can now see light at the end of the tunnel.

The CPI inflation in South Africa has also gone from a high of 7.1% to around 4.7%, which is a big improvement. This has also raised the hopes that South Africa's central bank will also stop the rate hike cycle.

The survey has also revealed that a further decline in food prices will allow consumers to spend more money. As a result of this, the Q4 results will likely see an improvement in the retail sales volume.

The relationship between the interest rate and inflation is a very tricky one and is thus making it difficult for South Africa to manage growth. At the end of the day, we can't ignore the ill effects of high-interest rates on the economy and how it hurts consumer confidence.

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