March 16 (Reuters) – South Africa’s consumer confidence in the first quarter returned to pre-lockdown levels, a survey showed on Tuesday, helped by a sharp decline in COVID-19 cases since the peak of the second wave in early January.
The consumer confidence index (CCI), sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research (BER), rose to minus 9 points from minus 12 points in the fourth quarter.
South Africa enforced one of the world’s strictest lockdowns in March last year, forcing mines, manufacturers, retailers and services to shut down or operate under tight regulation.
Government support schemes, higher-than-inflation adjustments to personal income tax brackets, soaring equities on the stock market, employment recovery and COVID-19 vaccine rollouts also aided the rebound, according to the survey.
The rise in the first quarter was driven by consumers’ expectations about the performance of the economy and their household finances in 12 months, according to the survey, while the time-to-buy durable goods index lagged behind.
The survey also noted the recovery continues to be fuelled by a rise in low and middle-income sentiment and that the economic boost would be more robust if high-income consumers recorded a similar rise in confidence levels.
However, the survey warned that a third coronavirus wave could dampen prospects and employment levels would need to rebound considerably to counter unfavourable dynamics.
“The pace of the recovery in real household consumption expenditure is therefore expected to slow somewhat compared to the fourth quarter, despite the slight increase in consumer confidence in the first quarter of 2021,” the survey said. (Reporting by Tanishaa Nadkar in Bengaluru; Editing by Ramakrishnan M.)
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