R45 billion blow to South Africa

South African consumer confidence fell sharply in the second quarter as households confronted a sharp rise in fuel prices caused by fallout from the Iran war.

First National Bank’s consumer-confidence index compiled by the Bureau for Economic Research slumped to -19 in the three months through June from -7 in the previous quarter.

That was the lowest reading since the first quarter of 2025, when confusion over a proposed increase in value-added taxes delayed adoption of the nation’s budget.

The rise in fuel prices as the conflict constrained energy supplies added an estimated R45 billion in costs to the South African economy, FNB said.

“The household budgets of affluent consumers have been hard hit by the massive petrol and diesel price increases during the second quarter,” FNB Chief Economist Mamello Matikinca-Ngwenya said in the statement.

Matikinca-Ngwenya added that an interest-rate increase by the central bank to curb inflation could also dampen sentiment.

The South African Reserve Bank raised borrowing costs by 25 basis points to 7% last month in anticipation of higher inflation, which has since risen to 4.5% in May compared with 3.1% in March. The bank has a 3% inflation target with a tolerance band of one percentage point on either side. It has repeatedly vowed to defend the goal.