South African consumer confidence improves

Jan 31, 2018

Consumer confidence in South Africa improved slightly in the fourth quarter, reflecting stronger-than-expected economic growth in previous quarters, a survey showed on Wednesday.

The consumer confidence index, sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research, improved to -8 from -9 in the second quarter.

“The improvement in consumer sentiment regarding South Africa’s economic prospects correlates with the stronger-than-expected rebound in real GDP growth during the second and third quarters of 2017,” Jason Muscat, senior economic analyst at FNB, said.

South Africa’s economy grew more than expected in the third quarter as the agricultural sector continued to recover from a severe drought while mining and manufacturing also improved, lifting hopes the country may avoid further credit downgrades.

Economic growth in the second quarter lifted the country from its first recession in nearly a decade.

However, Muscat added the “bleak outlook” for government finances remained one of the greatest risks to consumer spending in 2018.

The International Monetary Fund cut South Africa’s economic growth forecast for the next two years last week, citing rising political uncertainty that has dented investor confidence.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Mark Potter (Reuters)

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