Private Sector Credit Extension (PSCE)

However, mortgage advances and credit for fixed asset purchases remain subdued, despite ongoing interest rate cuts and a more accommodating monetary stance. The demand for property continues to be sluggish in South Africa, indicating low capital expenditure by both households and businesses. Consumer debt remains high due to relatively stagnant wages, and rising living costs continue to hinder recovery in this sector. Nonetheless, the full benefits of lower interest rates are anticipated to become evident later in 2025, as credit demand has shown an increase over the past four months following interest rate decreases earlier in the year.

In September, instalment credit sales rose by 0.4% month-on-month, achieving an annual growth rate of 7.7%. Over the past two years, consumers have increasingly relied on short-term credit to manage rising living expenses, reflected in a 9.0% increase in other loans and advances, which is notably higher than the 8.5% recorded in August.

With inflation remaining favourable, further rate reductions are possible, though not guaranteed, and could further boost disposable incomes, supporting increased demand for goods and fixed assets in the third and fourth quarters of 2025, and into early 2026.