South African Q1 consumer confidence weakens amid Ukraine jitters

First National Bank Alaska

17/03/2022 08:00

March 17 (Reuters) - South Africa's consumer confidence
dropped during the first quarter of 2022, a survey showed on
Thursday, after Russia's invasion of Ukraine dampened sentiment
and increased caution among investors.
    The consumer confidence index (CCI), sponsored by First
National Bank (FNB) and compiled by the Bureau for Economic
Research, slipped to minus 13 during the first quarter from
minus 9 in the prior quarter. 
    The latest reading remains well below the long-run average
CCI reading of +2 since 1994. 
    "The marked decline in the confidence levels of affluent
consumers can largely be explained by the alarming images of
Russia's military invasion of Ukraine, unprecedented sanctions
against Russia and the unfolding economic ramifications of this
conflict," FNB Chief Economist Mamello Matikinca-Ngwenya said.
    Russia's invasion of Ukraine, which Moscow says is a
"special military operation", and concerns over inflationary
pressures and deterioration in the global economic outlook have
triggered fears among South African consumers, the survey said. 
    Along with soaring oil prices, global wheat prices are
likely to spill over into higher food inflation, while
economists expect another interest rate hike at the end of
March, according to the survey. 
    "Falling consumer confidence levels signal a decreased
willingness to spend among households, while higher inflation
will also erode their purchasing power, or ability to spend,”
added Matikinca-Ngwenya.
    


 (Reporting by Shanima A in Bengaluru; Editing by Sherry
Jacob-Phillips)
 ((shanima.a@thomsonreuters.com; (Direct: +91 77 6034 7399 );))