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South Africa business confidence falls for third straight quarter: survey

BUSINESS
By Reuters | November 28th 2018
Miners work deep underground at Sibanye Gold's Masimthembe shaft in Westonaria, South Africa. [Photo: Reuters]

South African business confidence fell for the third straight quarter, a survey showed on Tuesday, as country struggles to grow in a recession-bound economy.

The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research fell to 31 points in the fourth quarter from 34 points in the third, dropping further below the 50-mark that separates net positive and negative readings.

The index had lost six points in the third quarter and four in the second quarter.

“While President (Cyril) Ramaphosa’s refreshing new focus on public-private-sector partnerships is welcome, the reality is, a multitude of political and policy issues, continue to weigh down on confidence,” RMB chief economist Ettienne Le Roux said.

South Africa’s central bank this month increased its benchmark lending rate for the first time in nearly three years, saying the risk of higher inflation in the longer-term remained elevated and that it could not risk waiting until later to take action.

The government predicted wider budget deficits and cut growth forecasts in a bleak budget in October that focused spending on infrastructure, manufacturing and agriculture to boost the economy.

Inflation rose to 5.1 percent year-on-year in October, bang in line with a Reuters poll forecast with food prices edging lower while the impact of higher global oil prices was subdued.

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