South African Consumer Confidence Nears 2025 Peaks This Holiday Season

Consumer confidence in South Africa has climbed to its highest level in 2025, as households and businesses prepare for the holiday season amid signs of easing economic pressure, according to a quarterly survey released Tuesday by First National Bank (FNB) and conducted by the Bureau for Economic Research (BER).

The FNB / BER Consumer Confidence Index improved to –9 in the fourth quarter, up from –13 in the previous quarter, marking the strongest reading of the year. All three sub-indices — economic outlook, household financial outlook, and suitability of the present time to buy durable goods — registered gains over the prior quarter.

Key Drivers of the Uptick

According to the survey’s lead analyst, several developments helped lift sentiment: a 47cent per litre drop in petrol prices between August and November; a decline in food inflation, which slowed to 3.9 percent in October from 5.5 percent in July; the creation of 248,000 jobs in the third quarter; an interest-rate reduction; and a stronger national currency.

In addition, a recent upgrade of South Africa’s sovereign credit rating by S&P Global — the first upgrade in nearly two decades — has contributed to improved outlook for growth. The agency now forecasts GDP growth rising to 1.1 percent in 2025, up from 0.5 percent in 2024.

What It Signals Ahead of the Holidays

Analysts interpret the improved confidence as a signal that households are likely to increase spending ahead of the festive period. While retail-sales growth is still expected to slow year-on-year, the survey notes that the slowdown may be milder than previously anticipated.

The rebound in consumer sentiment coincides with a broader uptick in business optimism. The Rand Merchant Bank / BER Business Confidence Index (BCI) rose five points in the same quarter to 44 — three points above its long-term average — suggesting renewed momentum across multiple sectors.

Challenges Remain

Despite the encouraging signals, the confidence index remains in negative territory, reflecting ongoing economic headwinds. Some households and consumers may still be cautious about committing to major purchases, particularly given lingering concerns about income stability, broader macroeconomic conditions, and uncertainty heading into 2026.

Looking Ahead

With inflation moderating, borrowing costs lower, and consumer sentiment on the rise, the festive season presents an opportunity for retailers, businesses and service providers to capitalize on renewed demand. However, sustaining this momentum into the new year will depend on consistent macroeconomic stability and further improvements in employment and purchasing power.

As South Africa closes 2025 on a note of cautious optimism, the improved confidence reading underscores the fragile balance between recovery and underlying economic risks. Analysts caution that while upbeat holiday-season spending may offer a temporary lift, structural reforms remain essential to support long-term consumer and business confidence.