The consumer confidence index (CCI) compiled by the Bureau for Economic Research remained at +7 in the fourth quarter, compared with the preceding quarter.
"The fact that the CCI held steady at this fairly positive reading during the fourth quarter is good news and signals that consumers' willingness to spend is still relatively high," FNB Chief Economist Mamello Matikinca-Ngwenya said.
The sharp drop in fuel prices should bring long-awaited budgetary relief to many households and simultaneously reduce the pressure on the South African Reserve Bank to implement further interest rate hikes to counter rising inflation, Matikinca-Ngwenya said.
Farms and factories dragged South Africa out of its first recession in almost a decade, data showed in December, as the economy grew by more than expected in the third quarter. [nL8N1Y925Z]
The positive data was a boost for President Cyril Ramaphosa, who has pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.
Matikinca-Ngwenya also cited the risks of further load shedding and a potential sovereign credit rating downgrade by Moody's to junk status and said it was unlikely that either job creation, wage growth or credit growth would improve meaningfully during the first half of 2019.
Still, consumer confidence has been better off than levels seen during former President Zuma's last three years, when the index ranged between readings of -3 and -15.
(Reporting by Noor Zainab Hussain and Samantha Machado in Bengaluru; Editing by Anil D'Silva)
