Consumer confidence in South Africa touched an all-time high in the first quarter of 2018, as positive political and economic developments made consumers much more willing to spend.
The consumer confidence index, sponsored by First National Bank and compiled by the Bureau for Economic Research, improved to +26 from -8 in the final quarter of 2017.
“The extraordinary improvement in consumer sentiment during the first quarter of 2018 can largely be ascribed to the change in the country’s leadership, which triggered many positive economic developments,” said Mamello Matikinca, chief economist at FNB.
Consumer confidence surged across all income and population groups in the period, the survey showed.
South African retail sales rose 4.9% year-on-year in February after increasing by a revised 3.3% in January, data from the statistics office showed on Wednesday.
Under new President Cyril Ramaphosa, Treasury took the politically risky step of raising value-added tax for the first time in 25 years in bid to increase revenues and slash the budget deficit.
The latest figure follows a jump in business confidence after Ramaphosa’s election as leader of the ANC in December. He later replaced scandal-plagued Jacob Zuma as president, raising expectations that South Africa will see reforms.
Attention is now shifting to whether he can follow through on promises to revamp the economy.
The World Bank raised its forecasts for the South African economy in early April but warned that growth potential would remain weak without concerted efforts to reduce inequality and stimulate competition.