The BER’s measure of consumer confidence improved to -10 points in Q2 2025 from -20 points in Q1 2025.

For reference, an outcome below 0 signifies consumer pessimism, with readings further from the 0 level signifying stronger pessimism.

Improved sentiment in Q2, although still well below the long-term average of -1 point, was driven by higher readings in all three sub-indices.

• The ‘economic outlook’ component reported the most notable improvement, jumping 14 points to -18 points in Q2 from -32 points in Q1.
• ‘Household finances’ moved into optimistic territory at +9 points from -1 point in Q1.
• Finally, the ‘suitability of the present time to buy durable goods’ index also improved to -21 points from -28 points in Q1.

Considering different income groups, sentiment improved across the board, led by a 19-point increase among ‘high-income’ respondents (-11 points in Q2 from -30 points in Q1). Nevertheless, sentiment among these individuals remains well below their H2 2024 average of -5 points.
Why does it matter
The latest improvement in consumer sentiment, a key determinant of future spending behaviour, is a welcome development.

Recall that Q1’s notable decline in consumer confidence (-20 points from -6 points in Q4 2024) was exacerbated by the survey being conducted immediately after the initial proposed 2% VAT increase and fears of the GNU breakup.

A successful Budget tabling in May (without VAT), an interest rate cut, stronger equity markets, a pause on US tariffs and fewer news headlines regarding the souring relations between SA and the US, likely supported improved confidence in Q2.

Finally, confidence also remained supported by tailwinds from two-pot retirement withdrawals and very low inflation.

However, inflation will likely start rising, and two-pot withdrawals have largely concluded. More broadly, the global and domestic economic outlook remains weak. As such, further scope for sentiment improvement remains limited.

Increased pessimism in H1 2025, compared to H2 2024, is likely to weigh on the consumptive sectors of the economy, which have largely been supporting domestic activity.