South African consumers could face a more subdued festive season as rising fuel prices, inflation and the prospect of higher interest rates put further pressure on household finances.

Independent economist John Loos says the lack of progress towards resolving the US-Iran conflict and resulting elevated oil prices are adding to the financial pressure on South African households.

Loos says this could lead to slower economic and household disposable income growth heading into the year-end shopping season.

South Africa’s petrol price increased by R1.34 a litre and diesel by around R3 a litre at the start of September. Fuel costs have increased cumulatively by close to R7 per litre for petrol and around R12 per litre for diesel since March 2026.

Loos also expects the South African Reserve Bank to raise interest rates by a further 25 basis points before the end of the year. This would increase the cost of servicing debt and could discourage credit-dependent purchases such as vehicles, furniture and homes.

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Loos says recent economic indicators are already showing signs of weakening. Real retail sales growth slowed to 2.2% in the first half of 2026, from 3.7% for 2025 as a whole, while consumer confidence fell sharply in the second quarter.

He expects consumers facing greater financial pressure to cut back on non-essential spending, postpone larger purchases and reduce spending on areas such as eating out and holidays.

Restaurant and takeaway spending has already shown signs of slowing, with real growth declining from 3.5% in 2025 to 1.6% during the first half of 2026.

Loos says the festive season could therefore see a relatively “flattish” consumer spending environment, with inflation elevated, interest rates potentially rising and economic and employment growth slowing.

Real household consumption expenditure is forecast to grow by just 1.6% in 2026, compared with 3.6% in 2025.