Consumer confidence peaks at all-time high

THE INTEREST rate is having little effect on consumers, according to the latest findings by the First N ational Bank (FNB) Consumer Confidence survey. Despite warnings and increases that were made by the South African Reserve Bank (SARB) last year, the FNB/BER Consumer Confidence Index rose by 5 points, to reach an all-time high of 23 points. “One can tartly say that consumers are not getting it,” commented FNB chief economist Cees Bruggemans on this growth. This may be due to the consumers’ belief that the country’s growth prospects are far from over. Continuing confidence in the country’s economy, which is being fuelled by the fixed investment prospects, employment growth and a sound asset market are all seen as reasons for the growth. And according to Bruggemans, households are correct in holding to this belief. “With our macro-policy providing gentle headwinds, real interest rates having risen ahead of the coming inflation bulge as CPIX temporarily breaches 6%, and Treasury filing its boots with tax overruns, pointing at a 1.5% budget surplus this year, the lively demand growth functions as a useful pulley to keep expanding at full potential,” says Bruggemans. This growth is expected to continue to climb.