South Africa’s business confidence climbed to its highest level in five months in July helped by a firmer currency, falling inflation and an increase in vehicle sales, a survey showed on Tuesday.
The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) accelerated to 95.3 in July from 94.9 in June. It was the highest level since February 2017.
The business group said the main contributors to the improvement were made by higher vehicle sales, more building plans passed, lower inflation and higher share prices.
SACCI also said a firmer currency, on a trade weighted basis, had also helped smooth some of the negative sentiment that followed the sudden firing of Pravin Gordhan as finance minister in March and subsequent credit downgrades to “junk”.
“Locally there are indications that growth in the second quarter may be slightly positive. The inflation rate is also slowing down,” SACCI economists said in a statement.
Africa’s most industrialised economy slipped into recession in March, while political scandals and policy uncertainty, including a no-confidence vote against President Jacob Zuma later on Tuesday, have dampened investment.
SACCI warned that factional battles in the governing African National Congress could hamper a recovery.
Moody’s, the last of the top three ratings firms to still rate the country investment grade, is due to announce a rating review on Friday.
Reporting by Mfuneko Toyana; Editing by James Macharia