Cape Town – The latest Business Confidence Index of the SA Chamber of Commerce and Industry (SACCI) recorded the highest level since February 2017.
SACCI said on Tuesday its July index shows that business confidence continues to regain lost ground after former minister of finance Pravin Gordhan was replaced at the end of March 2017.
“Business confidence, although still relatively low, remains sensitive to political and uncertain economic policy positions,” SACCI said in a statement.
At 95.3 in July 2017, the BCI was 0.7 of an index point below last year’s July level and 0.4 of an index point up on last month.
“Certainty about workable economic approaches could contribute to improve business confidence and especially investor confidence,” said SACCI.
“Deliberations on economic policy continue and some rogue statements by political role players on policy positions adversely affect investor and business confidence. These utterances, although popular, may not support a vibrant and prosperous economy. It creates expectations that a stalling economy will not be able to fulfil.”
Battling the recession should be at the forefront and noting the view of the credit rating agencies, in SACCI’s view.
It said locally there are indications that growth in the second quarter may be slightly positive.
“The inflation rate is slowing down. The exchange rate is unstable, but weak against the euro, the pound and the yen. The SA Reserve Bank (SARB) unexpectedly decided to lower the repo rate by 0.25 percentage points, implying that prime lenders pay 0.25 percentage points less interest. All these developments are contributing to an improved backdrop,” said SACCI.
“It is evident that South Africa could become more prosperous for all. There will be affluent and lower income groups that must propel this economy from junk status and the recession to make the country attractive. Perhaps the present more stable business confidence could inspire investor confidence in SA – here and abroad.”
Sourced from Fin24