Rallying Trust: Strategies to Reassure Consumers in Times of Crisis
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JIMMY MOYAHA: The latest release of the Consumer Confidence Index came out today, June 23, 2026, indicating that South Africans are feeling uneasy due to geopolitical tensions in the Middle East and the current economic climate in South Africa, among other influences.
We’ll dig deeper into this issue with independent economist John Loos, who is here with us to analyze the data.
John, it’s great to have you back on the show. Thanks for joining us. The latest inflation rate reported in South Africa is at 4.5%. Let’s start our conversation there.
This number isn’t helping to boost consumer confidence. While other factors may have influenced the results, it’s evident that consumer confidence is currently low.
JOHN LOOS: Absolutely, Jimmy. Even in the first quarter, before the Iran conflict began, the consumer confidence index was at minus seven, which was not particularly strong. Now it has fallen to minus 19 for the second quarter, indicating a further decline.
The conflict has directly impacted fuel prices, leading to a rise in oil prices, which has pushed general inflation from zero to 3% and now up to 4.5%. This increase is affecting disposable income.
Read: SA consumer sentiment dims as Iran war affects fuel prices
During the time of the survey, many participants may not have yet felt the effects of the recent interest rate hike, but worries about this increase were already surfacing prior to the Reserve Bank’s decision at the end of last month.
Thus, consumers’ growing concern is that rising inflation often results in higher interest rates.
Overall, the substantial drop in consumer confidence can mainly be traced back to the Iran conflict and the escalation in oil and fuel prices.
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JIMMY MOYAHA: John, let’s take a closer look at the South African context, especially concerning the inflation rates. Despite ongoing challenges, including the Covid-19 pandemic, inflation has remained under 7%, 8%, or 9%. Now standing at 4.5%, it typically aligns with our desired midpoint.
We know the target has been lowered to 3%. Should we genuinely be concerned about our inflation rate and its implications for the market?
JOHN LOOS: I wouldn’t classify this as an inflation shock, that’s for sure. It’s possible we may see a slight increase above 5% before it stabilizes.
However, with food prices decreasing and the possibility of a resolution regarding the Middle Eastern conflict, I expect that after next month’s interest rate meeting—where I anticipate the Reserve Bank may increase rates again—we’ll see an improving inflation situation shortly thereafter.
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Hence, I don’t view this as a significant inflation shock.
Still, it’s crucial to acknowledge that many South Africans, especially those with lower incomes, are struggling with inflation, as high unemployment and stagnant wages have been persistent issues.
The economy has remained largely stagnant for several years, so even slight pressures can lead to a rapid decline in consumer confidence.
A rise in inflation or a few interest rate hikes can quickly put many South Africans under strain.
JIMMY MOYAHA: Given the current levels of consumer confidence in South Africa, as you mentioned, unemployment is a critical aspect. When we compare our economy to international ones, we’ve actually received a positive ratings upgrade from agencies.
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Nonetheless, without economic growth, these discussions fail to resonate with consumers and the average South African, as economic growth is vital for job creation and an enhanced standard of living.
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How can we align consumer confidence with the economic growth we desire versus what is actually happening?
JOHN LOOS: Well, I think consumers are likely to remain in a state of weak confidence for several years. While we are gradually implementing structural reforms—such as improvements in electricity supply, which are better than a few years ago—there are also efforts to enhance Transnet’s functions, as well as the ports and logistics.
There are movements toward reforming the economy, but these foundational changes will take years before we see their effects.
The government still faces challenges, particularly with a weak infrastructure and a capital expenditure budget that requires significant enhancement. Substantial progress in infrastructure may not be evident for several years.
While there’s a shift in mindset—something that rating agencies seem to recognize— it will take time for these changes to translate into tangible economic benefits for consumers and households, particularly regarding employment and income growth.
JIMMY MOYAHA: Before we conclude, let’s discuss some external factors that might impact consumer confidence.
We know that the drop in confidence has largely stemmed from consumer pressures, including conversations about potential VAT increases.
As we approach a mid-term budget policy statement that is likely to introduce a fiscal anchor, what kind of relief can consumers expect from the government and external entities? And where should additional burdens be mitigated?
JOHN LOOS: I think consumers need indirect relief—especially through structural reforms that stimulate faster economic growth and create jobs. That is the primary path we must follow.
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It’s not the government’s responsibility to directly provide income or extensive relief for consumers. Instead, it should create an environment for sound economic policies that promote job creation.
However, there are indeed areas where consumers require relief.
These include municipal rates and rapid tariff hikes that consistently exceed inflation. Addressing these issues is vital before electricity expenses grow excessively burdensome.
Some government actions are causing inflation to rise above the general rate, and we anticipate aligning these rates with lower inflation levels in the future.
Furthermore, infrastructure enhancements will be essential; tangible progress in repairing roads and improving service delivery will significantly bolster consumer confidence.
While visible improvements may take time, they are crucial for nurturing increased consumer confidence.
That said, I truly believe that once the conflict comes to an end and petrol prices start to decline—possibly as early as next month—consumer confidence could improve in the third quarter, rising from the current minus 19, which continues to reflect a negative outlook. This conflict is unlikely to last much longer.
JIMMY MOYAHA: Restoring consumer confidence is vital, and we’ll see if that change occurs.
In the meantime, we must recognize that the economy is in urgent need of support. We are progressing in the right direction, but there is definitely room to boost our efforts.
Independent economist John Loos has joined us for a discussion on consumer confidence in South Africa and the future landscape.