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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 30, 2024

Better than Expected

Private Sector Credit Extension (PSCE)

August 2024

In August 2024, South Africa saw a 5.0% rise in demand for credit, surpassing expectations of 4.0%. While instalment credit sales and loans showed growth amid increasing financial pressures, asset accumulation via mortgage advances remains low. The recent interest rate cut could stimulate demand for properties in the coming months.

Demand for credit, as indicated by the Private Sector Credit Extension (PSCE) report from the South African Reserve Bank, increased by 5.0% in August 2024, surpassing market expectations of 4.0%. Credit demand rose across all major categories, both month-on-month and year-on-year.

Instalment credit sales grew by 0.5% in August following a contraction in the previous month, and year-on-year, they expanded by 7.5%, compared to a 7.9% increase recorded the prior month. Over the last 24 months, consumers have increasingly turned to short-term credit to maintain their lifestyles amid rising financial pressures and a significant increase in the cost of living. This trend is further supported by a rise in loans and other advances.

In contrast, asset accumulation through property and fixed asset purchases remains low, with mortgage advances growing by only 3.0% in August, following a 2.9% increase the previous month. The growth rate for mortgage advances has significantly decreased in the latter stages of 2023, primarily due to the impact of higher interest rates on the property sector. While a 25-basis point reduction in interest rates is unlikely to cause a drastic uptick in demand for properties and fixed assets, it is viewed positively as a step toward stimulating overall demand. If the South African Reserve Bank announces further rate cuts, this could bolster property demand in the next 12 to 18 months.

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South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.