A Major Blow for Those Earning Over R240,000! The start of 2026 has brought some welcome news for South Africa’s economy. According to the recently released FNB/BER Consumer Confidence Index (CCI), consumer sentiment has improved compared to recent times. Although the figure remains in negative territory, clear signs of improvement are evident. Optimism regarding economic conditions has risen, particularly among high- and middle-income groups; however, escalating tensions in the Middle East have cast a shadow of uncertainty over this positive environment.
CCI Improves, Yet Challenges Persist
In the first quarter of 2026, the CCI level reached -7—considered the strongest reading since the fourth quarter of 2024. That earlier period coincided with the implementation of the “two-pot” retirement savings system, which provided financial relief to the public. Nevertheless, a level of -7 also indicates that a fully positive sentiment has not yet taken hold in the market.
Several factors underpin this improvement. Wealthier segments of the population have benefited from the ability to access pension fund withdrawals, declining interest rates, a buoyant stock market, and a strengthening currency (the Rand). All these factors have bolstered their financial positions and boosted their confidence.
Impact of Middle East Tensions
Although the majority of the survey data was collected prior to the February 25th Budget Speech and the strikes launched by the U.S. and Israel against Iran on February 28th, the impact of these events may become apparent in the coming months. A sharp surge in oil prices, a downturn in the stock market, and disruptions to travel could undermine consumer confidence.
Experts believe that these developments pose a significant risk to the trajectory of improving consumer confidence, potentially leading to a decline in the second quarter.
Economic Expectations Rise, But Spending Remains Subdued
According to the report, indices related to the economic outlook and household financial positions have shown improvement. The economic outlook index rose from -19 to -14, while the index for household financial positions climbed from 5 to 12. This suggests that people are feeling somewhat more optimistic about the future. However, when it comes to major purchases—such as furniture or electronics—public sentiment remains subdued. This index has declined, dropping from -14 to -21. A major contributing factor is that the South African Reserve Bank did not cut interest rates in January 2026, resulting in the cost of borrowing remaining high.
Greatest Improvement Among the Wealthy
When analyzed by income level, the most significant improvement has been observed within the high-income bracket. Confidence among individuals with a monthly income exceeding R20,000 has risen from -12 to -4. This is considered a substantial improvement.
Expectations regarding their household financial situation have also strengthened considerably among this group. This specific index has climbed from 4 to 14—its highest level since 2019. Notably, this is the only demographic that views the current period as somewhat favorable for making major purchases.
The Situation of the Middle and Low-Income Brackets
A marginal improvement has been observed within the middle-income bracket (R5,000 to R20,000). Their confidence level has edged up from -8 to -7. Nevertheless, optimism regarding the future has grown within this group as well, with a larger number of respondents believing that their financial situation will improve over the coming year.
Conversely, the situation of the low-income bracket (less than R5,000) remains a cause for concern. Their confidence level has fallen from -8 to -12. Factors cited as contributing to this decline include sluggish job growth and stricter conditions regarding social assistance programs.
Pressures from Employment and Inflation
In the final quarter of 2025, only 44,000 new jobs were created—a figure considered notably low. Furthermore, increases in social grants have been kept limited relative to inflation, and the SRD grant remains frozen at R370. This has placed increased pressure on the incomes of the poor.
Significant increases in fuel prices are anticipated in the near future. It is estimated that petrol prices could rise by approximately R5 per liter, and paraffin prices by up to R10 per liter. This will have a direct impact on the lower and middle classes.
What will the future trends be?
Experts believe that consumer confidence may decline in the second quarter due to the crisis involving Iran. A downturn in the stock market, a weakening currency, travel disruptions, and rising fuel prices will exert a negative influence on this outlook.
Furthermore, the likelihood of interest rate cuts has diminished, thereby dimming hopes for economic relief. Overall, even though the beginning of 2026 offers positive signs, global circumstances could reverse this recovery.
FAQs
Q. What is the Consumer Confidence Index (CCI)?
A. It measures how optimistic consumers are about the economy and their finances.
Q. What is the current CCI for South Africa (Q1 2026)?
A. The CCI stands at -7, showing improvement but still negative sentiment.
Q. Why did consumer confidence improve?
A. Due to lower interest rates expectations, stronger currency, rising stocks, and pension withdrawals.
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