The latest Consumer Confidence Index (CCI) for South Africa, released on September 25, 2025, registered at -13.00, falling short of the -7.00 consensus estimate and down from -10.00 in the previous month. This reading signals a notable deterioration in consumer sentiment, reflecting growing caution among households amid persistent economic challenges. The data, sourced from the Sigmanomics database, highlights a complex macroeconomic environment influenced by domestic and external pressures.

Drivers this month

• Rising inflationary pressures eroding purchasing power
• Slower job growth and elevated unemployment rates
• Heightened geopolitical tensions impacting trade and investment

Policy pulse

The current CCI level remains well below the neutral zero mark, underscoring subdued consumer optimism. This contrasts with the South African Reserve Bank’s (SARB) inflation target band of 3-6%, which remains under pressure due to global commodity price volatility and local supply constraints.

Market lens

Immediate reaction: The ZAR/USD currency pair weakened by 0.40% within the first hour post-release, reflecting investor caution. Short-term government bond yields edged up by 5 basis points, signaling increased risk premiums.

Consumer confidence is a leading indicator of household spending, which accounts for roughly 60% of South Africa’s GDP. The current -13.00 reading marks a deterioration from the previous month’s -10.00 and remains below the 12-month average of -11.30. Historically, the index has fluctuated between -25.00 during the mid-2023 economic slowdown and a recent peak of -5.00 in September 2024, reflecting volatile consumer sentiment amid shifting economic conditions.

Monetary Policy & Financial Conditions

The SARB has maintained a cautious stance, keeping the repo rate steady at 8.25% since June 2025. Elevated interest rates continue to weigh on credit availability and household debt servicing costs, dampening consumer spending power. Inflation remains sticky at 6.80% YoY, above the SARB’s target range, pressuring real incomes.

Fiscal Policy & Government Budget

Fiscal consolidation efforts persist, with the government targeting a budget deficit of 5.50% of GDP in FY2025/26. However, rising social spending and infrastructure commitments limit fiscal space, constraining stimulus options that could otherwise bolster consumer sentiment.

External Shocks & Geopolitical Risks

Global commodity price volatility, particularly in energy and metals, has increased input costs for South African producers. Additionally, geopolitical tensions in key trade corridors have disrupted supply chains, contributing to inflationary pressures and uncertainty.

Comparing the current reading with historical data, the index remains far from the lows of -25.00 recorded in mid-2023 during a period of economic contraction. The recent uptick in inflation and stagnant wage growth have contributed to this renewed dip in confidence. Consumer sentiment has shown sensitivity to SARB’s monetary tightening cycles and fiscal austerity measures over the past two years.

Market lens

Immediate reaction: South African government bonds (R186) saw yields rise by 5 basis points, while the ZAR weakened against the USD by 0.40%, reflecting heightened risk aversion. Equity markets showed muted response, with the FTSE/JSE All Share Index down 0.30% in early trading.

Looking ahead, consumer confidence in South Africa faces a challenging environment. Inflation is expected to remain elevated near 6.50% through Q4 2025, while unemployment hovers above 32%. These factors will likely keep consumer sentiment subdued. However, several scenarios could unfold:

Bullish scenario (20% probability)

• Inflation moderates faster than expected to below 5% by mid-2026
• Employment growth picks up, boosting disposable incomes
• Fiscal stimulus measures support household spending
• Consumer confidence rebounds to near -5.00 by Q2 2026

Base scenario (60% probability)

• Inflation remains sticky around 6-7%
• Unemployment remains elevated but stable
• Fiscal consolidation continues with limited stimulus
• Consumer confidence stabilizes near current levels (-13 to -10)

Bearish scenario (20% probability)

• Inflation spikes above 7.50% due to external shocks
• Labor market deteriorates further
• Fiscal pressures intensify, reducing government support
• Consumer confidence falls below -20, risking recessionary pressures

Policy pulse

SARB’s future rate decisions will be critical. A premature easing could stoke inflation, while further hikes risk deepening consumer pessimism. Fiscal policy flexibility remains limited amid debt sustainability concerns.

South Africa’s September 2025 Consumer Confidence reading of -13.00 signals ongoing headwinds for household spending and economic growth. The index’s decline from last month and its position below the 12-month average reflect persistent inflation, labor market challenges, and geopolitical uncertainties. While the SARB’s cautious monetary stance and government fiscal discipline aim to stabilize the economy, consumer sentiment remains fragile. Policymakers must balance inflation control with growth support to avoid a deeper confidence slump.

Investors and market participants should monitor inflation trends, employment data, and fiscal developments closely. The trajectory of consumer confidence will be a key barometer for South Africa’s near-term economic health and financial market stability.

Key Markets Likely to React to Consumer Confidence

Consumer confidence in South Africa strongly influences domestic equity, currency, and bond markets. The following tradable symbols historically track shifts in sentiment, providing insight into market reactions and risk appetite:

• JSE – South Africa’s primary equity index, sensitive to consumer spending trends.
• ZARUSD – The South African rand versus US dollar, reflecting currency risk and capital flows.
• NPN – Naspers Ltd, a major consumer-facing conglomerate, impacted by domestic demand.
• BTCUSD – Bitcoin, often viewed as a risk barometer during economic uncertainty.
• EURZAR – Euro to rand exchange rate, sensitive to geopolitical and trade developments.

Insight Box: Consumer Confidence vs. JSE Index Since 2020

Since 2020, South Africa’s Consumer Confidence Index and the JSE All Share Index have shown a positive correlation, with dips in confidence often preceding market pullbacks. For example, the sharp decline to -25 in mid-2023 coincided with a 15% drop in the JSE. Conversely, the confidence rebound to -5 in late 2024 aligned with a 10% rally in equities. This relationship underscores the importance of consumer sentiment as a leading indicator for equity market performance.

FAQs

What does the latest South Africa Consumer Confidence reading indicate?

The September 2025 reading of -13.00 indicates weakening consumer optimism, signaling caution in household spending and economic outlook.

How does consumer confidence affect South Africa’s economy?

Consumer confidence influences spending, which drives over 60% of GDP. Low confidence can slow growth and impact employment.

What factors are driving changes in South Africa’s consumer confidence?

Key drivers include inflation, unemployment, monetary policy, fiscal constraints, and external geopolitical risks.

Takeaway: South Africa’s consumer confidence remains subdued amid inflation and labor market pressures, posing risks to near-term growth but offering upside if inflation eases and employment improves.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.