World Economy

S. Africa Business Confidence Down

S. Africa Business Confidence DownS. Africa Business Confidence Down

South Africa’s business confidence fell to a new all-time low in May hurt by poor performance in sectors such as manufacturing and retail, a survey showed on Tuesday.

The South African Chamber of Commerce and Industry’s Business Confidence Index fell to 79.3 in May from 82.5 the previous month, Reuters reported.

The index had slipped to 79.6 in December after President Jacob Zuma changed finance ministers twice within a week.

“The BCI suffered a setback as the gradual recovery to April 2016 from a historic low level of 79.6 in December 2015 was undone in May 2016,” SACCI said in a statement.

“Seasonally adjusted merchandise import volumes had the largest negative month-on-month effect in May 2016 followed by real retail sales and a weaker weighted rand exchange rate against the US dollar, euro and the British pound.”

SACCI said possible downgrades to South Africa’s credit rating posed a risk to business confidence. It said the government should focus on measures that promote the production side of the economy.

South Africa has dodged downgrades from S&P Global Ratings and Moody’s, but analysts say a downgrade could be on the cards in December if policy measures failed to revamp an ailing economy.

Ratings agency Fitch is expected to publish its review on South Africa on Wednesday, the treasury said. Fitch has not said when it will publish its review.

Meanwhile, South Africa’s rand weakened in early trade on Tuesday as market focus shifted to a rating review from Fitch and first-quarter economic growth numbers both expected on Wednesday.

The rand traded at 14.9510 per dollar, 0.34% softer from its New York close on Monday.