South Africa’s consumer confidence plunged to its lowest level in over three decades in the second quarter of 2022, barring the sharp drop during the height of Covid-19.

The economic ramifications of Russia’s war in Ukraine, soaring petrol prices, escalating inflation, high interest rates and the non-payment of the R350 social relief of distress (SRD) grant were all factors in the decline, according to FNB and the Bureau for Economic Research’s (BER’s) Consumer Confidence Index (CCI) released on Wednesday. 

"Having already slipped from -9 to -13 index points during the first quarter of 2022, the [CCI]… plunged to -25 in the second quarter of 2022," the two said in a statement.

The CCI did drop to -33 in the second quarter of 2020, when the pandemic and the lockdown pummelled sentiment.

"[Barring that], the current reading is the lowest in more than three decades"

Stanlib chief economic Kevin Lings said on Twitter that the -25 drop is "consistent with an economic recession".

"[The] petrol price will rise substantially further next month, interest rates will increase, electricity outages are back with a vengeance, and water problems persist. Extreme!"

While there was growth in real consumer spending at 3.2% year-on-year, during the first quarter of 2022, the "dramatic deterioration in consumer sentiment now signals a marked slowdown in consumer spending in coming months," FNB and BER said. 

FNB chief economist Mamello Matikinca-Ngwenya said the ramifications of Russia’s war on the Ukraine dealt blows to global consumer confidence around the globe and South Africa was no exception.

“Whereas spiralling food and fuel prices are probably of primary concern to less affluent households, the prospects of further steep interest rate hikes and sinking share prices on the JSE would have compounded the inflationary pressures when it comes to middle- and high-income households,” Matikinca-Ngwenya said.

"The non-payment of the R350 per month SRD grant to 10.6-million South Africans in April and May in all likelihood also weighed on the confidence levels of many low-income households."