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South Africa business confidence at lowest since 1985 emergency

By on September 8, 2017

South African business confidence fell to the lowest level since a partial state of emergency declared by the former all-white government in 1985.

An index compiled by the South African Chamber of Commerce and Industry fell to 89.6 last month from 95.3 in July, according to an emailed statement on Wednesday. That’s the lowest level since August 1985, the month then-President PW Botha gave his infamous “Rubicon” speech that ended hopes for an earlier end to apartheid.

Policy uncertainty and political turmoil, including an attempt by the anti-graft ombudsman to change the central bank’s mandate, new regulations published by the mines minister and a no-confidence motion in President Jacob Zuma, have weighed on the economy, which fell into a second recession in less than a decade this year. Two credit-rating companies cut their assessments of the nation’s foreign-currency debt to junk in April after Zuma removed investor favorite Pravin Gordhan

The rand weakened 0.2 percent to 12.9368 per dollar by 1:07 p.m. in Johannesburg on Wednesday, taking the currency’s decline over the last three years to 17 percent.

While data on Tuesday showed the economy emerged from recession in three months through June, Finance Minister Malusi Gigaba said the quarter’s performance is not yet  a reason to celebrate. The central bank has halved its economic growth forecast for the year to 0.5 percent and slower-than-expected expansion could complicate Gigaba’s task of reining in the budget deficit.

(Bloomberg)