S. Africa business confidence drops in Q4

0 Comment(s)Print E-mail Xinhua, November 28, 2018
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JOHANNESBURG, Nov. 27 (Xinhua) -- The South Africa business community looks bleak in the fourth quarter this year than the same period last year, according to data released on Tuesday by the Stellenbosch University's Bureau for Economic Research institute.

The data sponsored by the Rand Merchant Bank (RMB) indicated that quarterly confidence index slipped to 31 points during the fourth quarter of 2018 from 34 points in the third quarter.

According to economic experts, South Africa's business confidence dropped to the lowest level after the country lost its investment-grade credit rating in the second quarter of 2017.

Experts believed that the tumultuous political situation in the country dragged down the business sentiment.

"While President (Cyril) Ramaphosa's refreshing new focus on public-private sector partnership is welcome, the reality is, a multitude of political and policy issues- chief among them which is the uncertainty around the government's land reform plans- continue to weigh down on confidence," RMB chief economist Ettienne Le Roux said in a statement.

"Unless these are resolved in a more speedily and concrete fashion, private-sector fixed investment, and by implication, economic growth, will remain disappointingly low. Time is running out as global headwinds are mounting and domestically inflation as well as policy interest rates have bottomed," Le Roux added.

Last week, South African Reserve Bank, the country's central bank, increased the repurchase rate by 25 basis points to 6.75 percent per annum for the first time in two years.

The central bank governor, Lesetja Kganyago, said the country's domestic growth outlook remained challenging. The bank also downgraded its GDP growth for 2018 to 0.6 percent from 0.7 percent. Enditem

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