South African households improved their financial resilience for the ninth consecutive quarter in the three months to June 2026, however, rising fuel prices and interest rates are slowing recovery.

The Altron FinTech Household Resilience Index (AFHRI) for the second quarter of 2026 shows the seasonally adjusted index rising to 116.1 in the second quarter.

While this is 16.1% above its base in the first quarter of 2014 in real terms, growth slowed to 0.1% quarter-on-quarter and 1.5% year-on-year.

“Lower interest rates between September 2024 and May 2026 did most of the work,” said economist Dr Roelof Botha, who compiled the index.

Since the rate-cutting cycle began in September 2024, the AFHRI has grown at an average of 2.4% a year in real terms, double the 1.2% recorded by GDP over the same period.

“It is the only measure in the index’s long-run comparison to outpace population growth.”

The South African Reserve Bank has since raised the repo rate twice, in May and September, taking the prime lending rate from 10.25% to 10.75%, mostly owing to fuel prices and global freight costs linked to conflict abroad, rather than from domestic demand.

Highlighting key indicators, he pointed out that the ratio of household income to debt costs rose 4.8% year-on-year, bank credit impairments improved and household consumption and disposable income both grew in real terms. Unit trust assets were the strongest performer, up 8.9% year-on-year.

Further, the labour market is the weak point. Private-sector salaries fell 1.8% in real terms over the year, private-sector employment grew by only 0.5% and public-sector employment fell 3.5%. Civil debt defaults also deteriorated sharply.

This quarter’s index does show several positives, including progress on electricity market reform, Moody’s revision of South Africa’s sovereign outlook to positive, a strong rand and firm platinum group metal prices.

An easing in global oil prices would quickly restore momentum to household finances.

“After nine quarters of improvement, households are holding their ground, but only just. What concerns me in this quarter’s numbers is where the support is coming from. Lower interest bills and investment returns have carried the index, while private-sector wages fell in real terms and civil debt defaults rose,” said Altron FinTech MD Johan Gellatly.

“That is a household sector living off its balance sheet rather than its pay cheque. With prime up 50 basis points since May and fuel costs still high, that cushion is getting thinner. Lasting resilience will only come from wage growth and new jobs, and that is the measure policymakers should be watching.”