Business confidence in South Africa has decreased in July due to various factors, including reduced merchandise export volumes, higher real financing costs, and the weak rand.
- The SA Chamber of Commerce and Industry (Sacci) business confidence index fell by 1.5 index points in July, reaching 107.3, down from June’s 108.8 and May’s 106.9.
- All eight real economic activity indicators of the Business Confidence Index (BCI) showed negative impacts on business confidence in July on a month-on-month basis.
- The business confidence index has remained stagnant over the past four months, indicating a challenging business climate for economic activity.
- The stagnant environment hinders long-term economic prospects, leading to limited fixed investment, inadequate conditions for robust economic growth, and challenges for job creation.
- Business confidence in South Africa has been influenced by both global and domestic issues affecting economic activity.
- The global economy’s growth is expected to slow down, impacting South Africa’s growth as well. The IMF predicts low positive growth for SA in 2023, with a potential growth of about 1.5% in 2024.
- Tighter monetary policy through higher interest rates to combat inflation has also affected economic activity. Factors like global inflation, fiscal spending, and sovereign debt distress add to economic challenges.