Consumer confidence slipped amid ongoing concern over the country’s economic outlook, recording its lowest fourth quarter reading in more than two decades.

A quarterly index measuring consumer sentiment dropped to -17 in the three months to December from -16 in the previous quarter, First National Bank said in a statement on Thursday.

“This suggests that consumers will keep tight control over their purse strings during the holiday shopping season, which should worry retailers of expensive luxury goods,” the Johannesburg-based lender said.

South Africa’s economy contracted 0.2% in the three months to September, hobbled by poor logistics and the country’s erratic electricity supply, which has suffered almost daily power outages this year.

Consumers are being pressured by the rising cost of living and higher borrowing costs, after the central bank hiked interest rates to curb inflation. While it held them steady at a 14-year high of 8.25% at last month’s policy meeting, policymakers warned they would act again if necessary to keep price pressures at bay.

The index gauging consumer sentiment on the economic outlook weakened to -28 from -22 in the prior quarter, the survey showed. On the other hand, consumers expect their own finances to perk, up with a measure of households’ financial outlook improving to 3 from -1.

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“Consumers are cognisant of the adverse implications that factors like high levels of load-shedding, Transnet’s logistical constraints and a tightening in fiscal policy hold for economic growth in South Africa,” said FNB chief economist Mamello Matikinca-Ngwenya. “However — rightly or wrongly — they do not expect flagging economic growth to lead to an equivalent deterioration in their own financial positions.” — Ntando Thukwana, (c) 2023 Bloomberg LP