South Africa's Q1 consumer confidence plunges as power crisis weighs

First National Bank Alaska

23/03/2023 08:00

March 23 (Reuters) - South Africa's consumer confidence
plunged in the first quarter, according to a survey released on
Thursday, as the country continued to be plagued by severe power
shortage and a cost-of-living crisis.
    The consumer confidence index, sponsored by the First
National Bank (FNB) and compiled by the Bureau for Economic
Research, slumped to a reading of minus 23 points, from minus 8
points in the fourth quarter of 2022.
    The first-quarter plunge is the lowest on record since 1994
and indicative of extreme concerns among consumers about South
Africa's economic prospects and their household finances,
according to the survey.
    South Africa has been dealing with rotational power cuts up
to 10 hours on a daily basis, hampering businesses and economic
growth in Africa's most industrialised economy. 
    "The alarming increase in power outages since December and
the concomitant deterioration in South Africa's economic
prospects no doubt rocked consumer sentiment during the first
quarter," said FNB chief economist Mamello Matikinca-Ngweny.
    Vast majority of consumers believe it was inappropriate to  
buy durables like vehicles, furniture and household appliances
in anticipation that South Africa's economic growth over the
next 12 months will deteriorate, the survey showed.  
    Analysts say rolling power cuts nationwide may be fuelling
price pressures.
    Headline inflation rose slightly in February to 7% from 6.9%
in the prior month, data showed on Wednesday, fuelling bets that
the South African Reserve Bank would hike interest rates by 25
bps at its meeting next week.
    
    

 (Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry
Jacob-Phillips)
 ((Radhika.Anilkumar@thomsonreuters.com;))