South African consumer confidence edged higher in the first quarter of 2026, with the FNB/BER Consumer Confidence Index (CCI) rising two points, from a negative value of -9 to -7 in the final quarter of 2025.
The reading is the highest since the fourth quarter of 2024, when the two-pot retirement savings system allowed households to withdraw approximately R40bn from pension funds.
The improvement was driven almost entirely by high-income households (earning more than R20 000 per month), whose confidence jumped from -12 to -4. Affluent consumers benefited from two-pot pension withdrawals, declining interest rates, soaring stock prices and a stronger rand.
The survey’s sub-indices reflected mixed signals. The economic outlook sub-index improved from -19 to -14, while the household finances sub-index rose from 5 to 12. However, the suitability of the present time to buy durable goods fell sharply from -14 to -21, indicating consumers remain highly sensitive to borrowing costs.
Middle-income households (R5 000-R20 000 per month) confidence edged up one point to -7, while low-income households (less than R5 000 per month) deteriorated from -8 to -12.
“Disappointing employment growth towards the end of 2025 and tighter compliance measures in the social grant system in all likelihood punctured the confidence levels of low-income households,” said FNB chief economist, Mamello Matikinca-Ngwenya.
Statistics South Africa data confirm that only 44 000 jobs were created in the fourth quarter of 2025, equivalent to year-on-year growth of just 0.1%. The 2026 Budget Review shows nearly 35 000 social grants were cancelled and 8 600 adjusted, reducing payments by more than R200 million in 2025/26.
“Job creation would need to accelerate significantly to counter the adverse impacts of slower growth in social grants payments and, especially, the projected fuel price shock on low-income households,” Matikinca-Ngwenya said.
Matikinca-Ngwenya noted that prior to the US’s strikes on Iran, a whole range of positive developments bolstered the confidence levels of high-income consumers, including lower fuel prices, a stronger rand exchange rate, declining interest rates, soaring stock prices on the JSE and a gradual improvement in South Africa’s economic prospects.
While most of the fieldwork of the CCI survey had been completed by the time of Minister of Finance Enoch Godongwana’s budget speech, the full fiscal-drag relief on personal income tax and other positive tax changes for individuals and small businesses would likely have propelled the confidence levels of affluent households even higher.
However, Central Energy Fund estimates indicate petrol and paraffin prices could surge by about R5 and R10 per litre respectively in April due to oil supply constraints from Iran’s shipping blockade of the Strait of Hormuz.
“Unfortunately, the ripple effects from the Iranian war may well see a U-turn in high- and middle-income confidence during the second quarter. Apart from the 10% fall in the JSE, the weaker rand exchange rate, travel disruptions and projected jump in fuel prices, the likelihood of further interest rate cuts during the second quarter has now all but evaporated,” Matikinca-Ngwenya warned.
The latest GDP data showed real consumer spending grew 4.1% year-on-year in the fourth quarter of 2025 and 3.6% for the full year.
According to the report, while the first quarter confidence uptick suggests consumer spending appetite remained strong at the start of the year, the near-term outlook has shifted from cautiously optimistic to increasingly uncertain.
