Market Update: SA consumer mood extended upward trend — then came the war – Full Analysis

Confidence in the first quarter was boosted by declining interest rates, soaring stock prices and a stronger rand exchange rate that benefitted high-income consumers, FNB said.

Consumer sentiment in South Africa picked up to the highest level since 2024 in the first quarter, a trend that looks set to be derailed by the US-Israel war on Iran.

FNB’s consumer-confidence index, compiled by the Bureau for Economic Research, improved to -7 in the three months through March — the third consecutive quarterly increase, the Johannesburg-based lender said in an emailed statement on Tuesday. The data was collated before the conflict in the Persian Gulf erupted on 28 February.

“The fallout from this development, including skyrocketing oil prices, plunging stock exchanges and travel disruptions, may well knock consumer confidence in the coming months,” FNB Chief Economist Mamello Matikinca-Ngwenya said in the statement. “This introduces a clear downside risk to what had been a broadly improving consumer confidence trajectory.”

Confidence in the first quarter was boosted by declining interest rates, soaring stock prices and a stronger rand exchange rate that benefitted high-income consumers, FNB said. Finance Minister Enoch Godongwana’s generally well-received annual budget speech also supported sentiment, it said.

The index measuring the mood among low-income consumers declined to -12 from -8 as a result of “disappointing employment growth towards the end of 2025 and tighter compliance measures in the social grant system,” Matikinca-Ngwenya said.

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