South Africans are getting crushed
The latest PayInc Economic Index showed a marked decline in April 2026, signalling the mounting pressure on South African households and the economy.
According to the Index, economic activity declined 0.5% month-on-month to an index score of 104.8.
The index tracks the value of all electronic transactions cleared through PayInc, together with a wholesale cash component.
While the index is 6.1% higher than a year ago—when the local economy came under severe pressure from a tariff war launched by the United States—the current conditions are hitting households hard.
PayInc noted that the decline reflects the impact of the massive fuel price hikes that hit the country in April, delivering a blow to households and businesses.
April also saw a huge 8.8% increase in electricity tariffs from power utility Eskom, which added to the challenges.
“The moderation [in economic activity] comes amid growing uncertainty around the economic impact of the ongoing conflict involving the US, Israel and Iran,” the group said.
“This has led to significant fuel price increases introduced since April 2026.”
Cumulatively, South Africa has seen increases of R6.29/litre for petrol and R12.60/litre for diesel over the past two months.
On top of the direct impact on households and businesses, the higher prices are expected to have broader inflationary effects across the economy.
As a result, the index showed softer transaction activity across several payment streams in April.
Volume growth across the Real Time Clearing, PayShap and EFT credit transactions contracted, while all payment streams – except DebiCheck – recorded declines in transaction values.
After reaching 195.5 million transactions in March, the number of transactions cleared through PayInc declined to 186.3 million in April, although still 11.0% higher than a year ago.
The nominal value of electronic transactions similarly eased to R1.367 trillion from R1.475 trillion in March 2026.
South Africans warned to brace for more strain
According to independent economist Elize Kruger, consumers and businesses are already responding to the pressure of higher costs.
However, this is expected to continue influencing spending patterns in the months ahead.
“While the economy continues to demonstrate resilience in some sectors, the current environment points to a more cautious consumer and business outlook,” she said.
Specifically, analysts are closely monitoring upcoming economic data for potential second-round price effects stemming from higher fuel costs.
Consumer behaviour is already shifting in response to these pressures.
According to data released by Discovery Insure, motorists reduced fuel consumption by 35% during April, while trips declined by 10% and total distance travelled fell by 9%.
With transport costs escalating, PayInc said it expects weaker discretionary spending and softer demand for non-essential goods and services in the coming months.
More positively, Kruger noted that current fuel price recovery data from the Central Energy Fund points to a notable over-recovery for diesel.
Even with 50% of the fuel tax relief being added back to the price (adding R1.97 back), diesel users are still in line for some relief.
Despite this, the broader economic outlook for 2026 remains subdued, Kruger said.
“South Africa’s unemployment rate also remains elevated at 32.7% in the first quarter of 2026, reinforcing the challenging operating environment facing households and businesses,” she said.
Amid the strained environment, PayInc pointed to other economic indicators that continued to show resilience during April.
Figures released by Naamsa showed that total vehicle sales increased by 13.0% year-on-year in April 2026, while new car sales advanced by 14.3%.
The S&P Global South Africa Purchasing Managers’ Index also improved to 51.6 in April from 50.8 in March, reflecting the strongest expansion in private sector business conditions in 44 months.
The seasonally adjusted Absa PMI similarly rose above the neutral 50-point mark for the first time since September 2025, increasing to 52.6 in April from 49.0 in March.
However, the positive data comes with the caveat that the full impact of the Iran War has not been factored in, and the picture may change rapidly as inflationary pressures intensify.
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