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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
July 30, 2026

Private Sector Credit Extension (PSCE): June 2026

Explore the intricate dynamics of South Africa’s financial landscape in June 2026, where credit demand rose by 8.6%, falling short of market expectations, yet reflecting the broader impact of interest rate cuts since September 2024. This detailed examination reveals the interplay of mortgage stability amidst a sluggish property market, fuelled by high consumer debt and soaring living costs, particularly in energy. As instalment credit sales and short-term credit reliance mark notable shifts, delve into the potential for further interest rate hikes amidst persistent inflation and global energy challenges, informing strategic decisions in an uncertain economic climate. Discover the comprehensive insights and future implications in the full report.

In June 2026, credit demand grew by 8.6%, notably below the market’s expectation of 9.1%. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories experiencing increases, especially following the South African Reserve Bank’s decision to lower interest rates before the start of the conflict in the Middle East and subsequent increase in global energy costs and higher fuel prices.

Mortgage advances and credit for acquiring fixed assets remain unchanged at 4.7% from the previous month. The South African property market remains sluggish, reflecting low capital expenditure from both households and businesses. This sector’s recovery remains slow due to high consumer debt levels, low wage growth, and rising living costs, especially household fuel expenditure due to high international oil prices, as well as high administered prices such as water, electricity, and municipal rates & taxes.

In June, instalment credit sales increased by only 0.6% following the 1.0% from the previous month, marking an annual growth of 9.1%. Over the past two years, consumers have remained increasingly dependent on short-term credit to manage rising living costs, as shown by a 9.2% increase in other loans and advances, notably down from 11.5% in the May 2026 figures due to the higher interest these loans carry after the interest rate increase the previous month.

With inflation above the target range and fuel prices remaining elevated despite a recent slight dip, energy costs continue to put upward pressure. As a result, the SARB may hike interest rates again in the course of 2026 if inflation expectations persist above the upper threshold of the new target range of 4.0%.

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A view on Demand in the Economy: Retail Sales performance – July 2026 Data

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South African Gold and Foreign Exchange Reserves for August 2026

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