South Africa’s Consumer confidence index fell in the first quarter as effects of load shedding and higher fuel prices kicked in.
South African consumers were less inclined to spend in the first quarter of the year, new data shows. Consumers fell pessimistic about the economy due to load shedding—the S. African euphemism for power outages—and higher fuel prices. Despite the global decline in oil prices, fuel in S. Africa has been expensive due to higher taxes aimed at meeting elusive revenue targets.
First National Bank/Bureau for Economic Research’s (FNB/BER) consumer confidence index slumped to -4 index points during the first quarter of 2015 from zero in the fourth quarter of 2014, Business Day Live reports. “With the escalation of load-shedding, consumers have understandably become more negative about SA’s economic prospects,” FNB chief economist Sizwe Nxedlana said.
The FNB index is usually compiled after an estimated 2,500 households are surveyed on how they feel about their finances, whether or not they consider the current period as conducive to buying durable goods, and their sentiments about the economic outlook.
Decline in consumer confidence in Nigeria is likely to lead to lower aggregate demand as S. African goods are increasingly the victim of contint-wide boycotts over xenophobic attacks
The decline in consumer confidence in South Africa is likely to compound the economic implications of xenophobia. Besides violent attacks on foreigners slowing businesses in various areas, South African goods are also increasingly at risk of boycott across Africa, a development that could lead to job losses back home.