DStv Channel 403 Friday, 11 October 2024

SA's Economic Trouble | Consumer confidence hit by Eskom, inflation

JOHANNESBURG - Consumer Confidence has plunged to levels last seen during the peak of the COVID-19 pandemic.

The latest FNB/BER Consumer Confidence Index shows that the big drop mirrors the substantial deterioration in retailer sentiment during the first quarter.

READ: CPI rises to 7% in February

Retailer confidence contracted to 34 from 42 index points, the weakest level since the second quarter of 2020.

The about-turn in consumer confidence has been characterised by a sharp drop in consumer’s willingness to spend in the current climate.

The index also shows that high-income confidence declined the most in the quarter.  

READ: Inflation dips again but food prices rise

FNB chief economist Mamello Matikinca- Ngwenya says the trend is doubly alarming for the outlook for household expenditure, as affluent consumers also have the greatest spending power.

She says that unless there is a recovery in the economy, the trend is likely to continue.

"So an improvement in consumer confidence will be a function of how the economy performs, it will be a function of how the labour market performs and also the squeeze that consumers are experiencing from just a cost of living point of view," she said.

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