Business confidence stalls, eyes on policy implementation

(iStock)
(iStock)

Johannesburg - The Business Confidence Index inched up to 80.1 in February from 80.0 in January but remained close to 23-year lows, a survey by South Africa's Chamber of Commerce and Industry (Sacci) showed.

The index slipped to its lowest in 23 years in December after the shock sacking of the then finance minister and rising bets of interest rate hikes in the United States, and has hovered around the 80-mark in the past four months.

The chamber said a turnaround in business confidence would depend on the speedy implementation of policies announced in President Jacob Zuma's state of the nation address and Finance Minister Pravin Gordhan's 2016 budget.

Gordhan announced spending cuts, civil service job freezes and moderate tax hikes in his February 24 budget.

"The continuing uncertain business climate and wavering economic performance exacerbated the hesitant business mood in February 2016," Alan Mukokoi, chief executive of Sacci said in a statement.

"It is important that the statements be followed by concrete action and implementation. Results will take time to emerge and restore investor and business confidence."

South Africa's economy is expected to grow by 0.9% in 2016, the Treasury has said, compared with a previous estimate of 1.7%, as Africa's most industrialised economy struggles amid a global downturn in commodity prices and investor unease over the prospect of credit rating downgrades.

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