South Africans ready to spend this Easter

FNB’s data points to a projected increase in spending over the Easter period, as South Africans are expected to pay for accommodation, flights, fuel, hardware and clothing.

FNB projected this increase in spending as travel and family gatherings are traditionally the hallmarks of the Easter holiday period.

The bank noted that, in 2024, spending during the height of the holiday period increased 7.41% year over year. Due to the expected transactional activity, it expects spending to increase by just over 8% in 2025.

“As customers start to prepare to host family or make travel plans, we expect to see a notable increase in spending activity in various merchant categories,” FNB Credit Card and Card Platform CEO Senzo Nsibande said.

These categories include hardware, flights, accommodation, and clothing. Spending on these categories is expected to peak during the Easter holiday before tapering off toward the end of the season.

In 2024, online spending, which grew by 47.12% year-on-year, outpaced in-store spending, which grew by 24.19%.

Interestingly, customer payments with physical cards decreased by 10.88% year-on-year in 2024. In contrast, virtual card payments went up by 90.12% just before Easter, then ramped up to an incredible 134% growth at the peak of the Easter period.

“Our customers’ transactional safety, both online and in-store, is a key concern for us,” Nsibande said. 

“We can’t emphasise enough that customers must never share one-time passwords (OTPs), device passcodes, PINs, CVVs with anyone – they keep their card and PIN details safe as with all other sensitive personal information.”

He added that while FNB remains optimistic that spending this Easter will continue to grow, it remains to be seen exactly by how much.

“As always, to avoid excessive spending, we encourage our customers to actively use our nav»Money Smart Budgeting functionality on the FNB App,” he said. 

“It will help them manage, set up and track their budgets over the holidays. Our customers can also take advantage of eBucks they have accumulated to optimise their budgets.”

Consumers under pressure

This expected increase in spending is surprising considering South Africa’s depressed consumer environment.

South Africans are currently faced with high interest rates, a looming increase in the value-added tax (VAT) rate, and a high cost of living.

TransUnion’s fourth quarter 2024 South Africa Industry Insights Report also recently revealed that South Africans are increasingly turning to non-bank lenders for personal loans, which they are struggling to repay.

In addition, recent higher geopolitical tensions due to United States President Donald Trump’s tariffs have led to concerns of a global recession.

International trade law expert and extraordinary lecturer at the University of Pretoria, Dr Gustav Brink, warned that if Trump’s initial tariffs were to be imposed, world trade would decrease significantly.

This means the global economy would likely go into recession, although this largely depends on how other countries react to the United States’ increased tariffs.

A lot remains to be seen, as Trump recently announced a 90-day pause in his tariff plans, although his lowered reciprocal tariff of 10% is still in place.

“Depending on what happens during/after the 90-day pause, it could have a bigger or smaller global impact,” Brink said. “If the trade war with China continues – as it likely will – it will have a massive impact.”

For one, Brink explained that prices in the United States will increase significantly, thus fueling inflation, which might lead the Federal Reserve to increase interest rates.

The South African Reserve Bank recently warned that borrowing costs worldwide are likely to remain higher for longer due to doubts about the inflation outlook growing amidst Trump’s aggressive trade tariffs.

“Confidence around the medium-term outlook has reduced significantly due to heightened global trade tensions and elevated domestic uncertainties,” the Reserve Bank said.

“Although policy rates are expected to decline further in major economies, the new risks that have emerged suggest they will remain higher for longer.”