March 16, 2020 / 9:57 AM / 24 days ago

South African consumer confidence sinks to two-and-a-half-year low - survey

March 16 (Reuters) - Consumer confidence in South Africa fell sharply in the first quarter to hit its lowest level since the second half of 2017, as shoppers stayed away from buying durable goods in a bleak economy, a survey showed on Monday.

The consumer confidence index (CCI), sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research, stood at -9 in the first quarter, compared with -7 in the last quarter of 2019.

South Africa entered its second recession in two years in the final quarter of last year as agriculture, transport and construction contracted, data showed last week, highlighting the impact of power cuts on the economy.

“A confluence of adverse developments weighed down consumer sentiment during 2019, including the intensification of the electricity crisis to the point of level 6 load shedding by December 2019,” said Mamello Matikinca-Ngwenya, chief economist at FNB, in a statement.

South African retailers are in for another difficult year, with both sales volumes and retail selling prices expected to remain under pressure from weak consumer demand, Matikinca-Ngwenya said.

State power utility Eskom has repeatedly implemented nationwide power cuts in the past year that have dented economic growth and hurt business sentiment.

According to Reuters poll, South Africa’s central bank will cut rates by 25 basis points on Thursday to lift the economy out of recession, easing less aggressively than other global central banks trying to mitigate damage from the coronavirus outbreak.

South African president Cyril Ramaphosa declared a national state of disaster on Sunday as he announced a range of extraordinary measures to contain the outbreak.

Reporting by Samantha Machado and Shanima A in Bengaluru; Editing by Amy Caren Daniel

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