South Africa’s starting point is stronger than during the Russia-Ukraine war, when households faced rising interest rates, elevated inflation, and weak sentiment. In the first quarter of 2026, the FNB/BER Consumer Confidence Index improved, rising from -9 to -7, indicating a slight recovery in consumer sentiment.
This improvement was primarily driven by high-income households, whose confidence surged from -12 in Q4 2025 to -4 in Q1 2026. The economic outlook sub-index also saw a positive shift, moving from -19 to -14, while the household finances sub-index rose significantly from 5 to 12.
However, the situation for low-income households is less optimistic, as their confidence deteriorated from -8 to -12. This decline can be attributed to disappointing employment growth, with only 44,000 jobs created in Q4 2025, reflecting a year-on-year growth of just 0.1%. Additionally, tighter compliance measures in the social grant system have likely affected the confidence levels of these households.
Looking ahead, there are concerns regarding the potential impact of rising fuel prices. Petrol and paraffin prices could increase by approximately R5 and R10 per litre, respectively, in April due to oil supply constraints. This situation poses a significant risk to consumer confidence.
According to Mamello Matikinca-Ngwenya, “Unfortunately, the ripple effects from the Iranian war may well see a U-turn in high- and middle-income confidence during the second quarter.” This highlights the uncertainty surrounding the ongoing conflict in the Middle East and its implications for South African consumers.
Despite the cautious optimism reflected in the latest confidence data, observers note that the message is one of careful encouragement rather than broad-based optimism. Siphamandla Mkhwanazi stated, “The biggest near-term risk to confidence, however, is likely to come through fuel prices.”
Details remain unconfirmed regarding the full impact of the Iran conflict on consumer confidence, and the duration and severity of the Middle East conflict and its effects on oil infrastructure remain uncertain.
