South African Consumer Confidence Improves in First Quarter

Consumer sentiment in South Africa showed signs of recovery during the first quarter of 2026, according to a recent survey. The consumer confidence index, sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research, edged upward to minus 7 points from the minus 9 points recorded in the final quarter of the previous year. This improvement was largely attributed to a rebound in optimism among higher-income households.

Despite the quarterly gain, analysts warn that geopolitical tensions involving Iran could soon reverse these trends. The survey was conducted prior to the outbreak of conflict in the Middle East in late February, leaving the current data vulnerable to shifting global conditions. FNB Chief Economist Mamello Matikinca-Ngwenya highlighted the potential impact of the regional instability.

Unfortunately, the ripple effects from the Iranian war may well see a U-turn in high- and middle-income confidence during the second quarter.

The divergence between income groups remains a significant feature of the economic landscape. High-income households reported improved confidence levels, bolstered by lower interest rates, a stronger rand exchange rate, and a surge in stock market performance. Conversely, sentiment among low-income consumers continued to decline. This deterioration was driven by sluggish employment growth at the end of 2025 and more stringent compliance measures within the national social grant system.

Financial authorities are now preparing to respond to these complex economic signals. The South African central bank is scheduled to announce its latest interest rate decision this Thursday. Policymakers are currently evaluating the cumulative effects of a volatile stock market, a depreciating currency, and rising global oil prices on the broader economy.