Credit Stress Report 2025 Q2 is now available

This quarter saw divergent signals for consumer pressure, with declines in petrol prices alongside improvements in inflation and consumer confidence, coupled with the strongest YoY growth in loan numbers and balances since Covid.  However, the overdue balance for some loan products has seen significant increase, with the growth in home loan and credit card overdue balances particularly concerning. There was also an increase in the number of defaulting loans for the first time since early 2023.

Every Quarter, Eighty20, in collaboration with Xpert Decision Systems (XDS), releases a Credit Stress Report.  The 2025 Q2 Credit Stress Report examines consumer credit behaviour and the key economic events that shaped the second quarter’s landscape..

Economic Context and Global Uncertainties

Quarter two saw an escalation in geo-political tensions with ongoing, and at times escalated, conflict in both the Middle East and Ukraine. President Trump’s tariff policies have also fostered uncertainty and created volatility in global markets.  While inflation fell to its lowest level since Covid, and there were positive movements in petrol prices and consumer confidence, unemployment increased along with overdue balances and defaults. This report examines how the second quarter unfolded against this backdrop.

The Bureau for Economic Research (BER) further revised their 2025 real GDP growth forecasts downward to 1.1%, due to global economic uncertainty.

Highlights of the Second Quarter

The second quarter of 2025 presented a mixed bag of economic and credit indicators relative to the trends observed in the first quarter. Key developments included:

• The exchange rate shifted favourably against major trading currencies as the US dollar experienced its steepest decline in more than 50 years, sinking to its lowest level since 2022 Q2.
• There was some relief at the fuel pump with the price of petrol falling by nearly 3% QoQ.
• This was reflected in the FNB/BER Consumer Confidence Index improving from last quarter, when the measure had slipped to its lowest point since 2023 Q2.