South African consumer confidence index declining in Q1

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Consumer Confidence
Consumer Confidence
Spining

South Africa’s Consumer Confidence Index (CCI) declined from -9 to -13 index points in the first quarter of 2022 due to the Russian-Ukrainian conflict and other factors, said the First National Bank (FNB) Thursday.

The FNB said this is the lowest since the second quarter of 2021 when the government temporarily suspended a welfare grant to individuals affected by the fallout from the coronavirus pandemic and tightened lockdown restrictions to slow the spread of the Delta variant of the disease.

The FNB said the consumers reduced buying vehicles, furniture, household appliances and electronic goods, saying it is not the appropriate time to buy durable goods.

FNB Chief Economist Mamello Matikinca-Ngwenya said the increase in oil prices internationally has resulted in South Africa increasing the price of gas, diesel and paraffin by around 2 rands (about 13 U.S. cents) per liter since January. Meanwhile, wheat prices are likely to see higher inflation.

She said economists predict that the Reserve Bank of South Africa, the central bank, will raise interest rates at the end of March which would increase the cost of living in the country.

“Falling consumer confidence levels signal a decreased willingness to spend among households, while higher inflation will also erode their purchasing power, or ability to spend. Discretionary spending will come under strain as the prices of necessities such as food and fuel scale to new record highs and interest rates continue to edge up, calling for downward revisions to real consumer spending projections for 2022,” she added. Enditem

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