Business
High-Income South Africans in Crisis: Confidence Plummets as Economic Woes Deepen
South Africans earning more than R20,000 per month are facing a severe financial crisis, with confidence levels crashing to alarming lows. The latest FNB/BER Consumer Confidence Index (CCI) reveals a dramatic 14-point drop in sentiment, marking the worst outlook since 2023.
What’s Driving the Pessimism?
- Tax Burden Fears
- The proposed 2% VAT hike (later softened to 1% over two years) and no inflation adjustments to income tax brackets have left high earners anxious.
- “These tax proposals will deal a significant blow to high-income households,” warns FNB Chief Economist Mamello Matikinca-Ngwenya.
- US-SA Diplomatic Tensions & Trade Wars
- The souring relations with the US under President Donald Trump’s trade policies and the withdrawal of US aid have added to economic uncertainty.
- Load Shedding’s Return
- The brief resurgence of Stage 6 blackouts in early 2025 further eroded confidence, mirroring the 2023 crisis.
Who’s Hurting the Most?
- High-income households (R20,000+ monthly): Confidence plunged from -4 to -30—the steepest drop.
- Middle-income (R5,000–R20,000): Fell from -7 to -19.
- Low-income (under R5,000): Dropped from -7 to -17, though social grants may soften the blow.
What Does This Mean for the Economy?
Consumer spending has been South Africa’s growth engine, but rising taxes, inflation, and weak sentiment threaten to stall recovery.
“The decline in high-earner confidence is especially worrying—they drive spending,” says the BER. Without urgent reforms, GDP growth could weaken further.
{Source BusinessTech}
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