Big turnaround for middle class South Africans, says FNB

Mamello Matikinca-Ngwenya, FNB Chief Economist talks about South African consumers are gaining confidence in the economy, according to the latest FNB/BER Consumer Confidence Index (CCI), with middle-class and upper-income South Africans reigniting a spark in consumer spending. <br /> <br /> The overall index, compiled by FNB with the Bureau for Economic Research (BER) recovered from -20 to -8 points during the fourth quarter of 2022. <br /> <br /> This, after the index plunged to -25 index points during the second quarter of this year, said FNB. <br /> <br /> “Even though a reading of -8 still signifies depressed consumer sentiment, the scope of the rebound relative to the third quarter comes as a surprise given the sustained high inflation, frequent load shedding, successive significant interest rate hikes and a worsening global economic backdrop,” FNB said. <br /> <br /> A rebound in consumer sentiment shows an improvement in willingness to spend. Despite the will to spend more, consumers’ ability to do also needs to improve to translate into a significant increase in household consumption, the bank said. <br /> <br /> FNB’s chief economist Mamello Matikinca-Ngwenya said that while sharper interest rate hikes are still on the horizon, consumer sentiment is significantly improving. <br /> <br /> This is positive news for the economy and suggests that household consumption expenditure is holding up – or even expanding slightly – despite difficult economic conditions, said Matikinca-Ngwenya. <br /> <br /> The most recent movements by the CCI bring consumer sentiment more or less in line with the level attained during the same period last year (-9), as well as the year before (-7). <br /> <br /> The graph below, provided by FNB, indicates the CCIs movement since 1994. <a href="https://www.kaya959.co.za">kaya 959</a>