Private Sector Credit Extension (PSCE)

However, mortgage advances and credit for fixed asset purchases remain subdued despite the ongoing interest rate cuts. Demand for property continues to be sluggish in South Africa, signalling low capital expenditure by households and businesses. High levels of consumer debt, stagnant wages, and rising living costs continue to constrain a recovery in this sector. Nevertheless, the full benefits of lower interest rates are expected to materialise later in 2025, as household disposable incomes improve — driven by positive market sentiment and the possibility of additional rate cuts by the South African Reserve Bank (SARB).

In July, instalment credit sales increased again by 0.8% month-on-month, with an annual growth rate of 7.5%. Over the past two years, consumers have increasingly relied on short-term credit to manage rising living expenses, reflected in an 8.9% increase in other loans and advances, up from 7.1% in June.

With inflation remaining favourable, further rate reductions are anticipated to boost disposable incomes, supporting increased demand for goods and fixed assets in the third and fourth quarters of 2025 and beyond.