South African consumer confidence has dropped to the lowest level since President Cyril Ramaphosa came into power, bringing with him the so-called “Ramaphoria”.
The consumer confidence index, sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research, shows that the overall outlook for the economy has dimmed.
FNB economist Siphamandla Mkhwanazi says this could mean that the gross domestic product (GDP) will also take a knock when the figures for the third quarter are released.
He says consumers have lost their optimism about the future outlook of the country's economy.
He attributes this to a range of factors including rising unemployment, lack of wage increases in the private sector and declining corporate profits.
If history is anything to go by, it does suggest that the quarter three GDP numbers are going to come out not so glossy.— Siphamandla Mkhwanazi, Economist - FNB
It does appear that consumers have lost hope.— Siphamandla Mkhwanazi, Economist - FNB
Unemployment remains very high, in fact, it's increasing. Employees in the private sector aren't getting real wage increases, bonuses aren't being paid.— Siphamandla Mkhwanazi, Economist - FNB
This article first appeared on CapeTalk : Drop in consumer confidence could spell trouble for GDP in third quarter