Consumer Watch – March 2018

SA breathed a sigh of relief following the positive Moody’s announcement which kept the country above junk status. Also, the South African Reserve Bank’s rate cut will provide a welcome relief to SA households, in our view. In March, PMI was lifted above the 50-point neutral mark, while CPI and PPI eased further in February. On the negative side, business confidence took a slight knock, vehicle sales remain under pressure and scheduled increases in the Fuel and Road Accident Fund levies will increase fuel prices significantly in April. Another budget speech commitment which came into effect in April was the 1% increase in VAT to 15%, which we expect to impact consumption. Lastly, the rand showed stability in March, ending the month in-line with its average traded value during the month.