South Africa Business Sentiment Falls as Economy Recovers

South Africa’s business growth has fallen to a new low in September as covid restrictions and July riots in the city have disrupted economic recovery.

The South African Chamber of Commerce Sacci and Industry revealed that the business sentiment dropped from 91.9 to 91 in month of August, making it the lowest recording in a year. The Chamber stated, “The present business climate appears to have leveled out with the business confidence index, maintaining pre-covid 19 levels. Compared to a year ago when business climate was still on its initial recovery path, the September 2021 level of business confidence index reflects a much improved business climate despite the lagged effects of the July 2021 disruptions.”

On the other hand, the nation has experienced a sudden growth in its industrial sector due to growing demand caused by high commodity prices around the world. South Africa expected to boost its output by over 3% this year. The Central Bank has predicted an economic contraction of 1.2% in the last quarter of the year an average growth rate of 5.3% this year.

The economic growth momentum was disrupted after deadly riots broke out in the country, leading to destruction of fixed assets along with inventories. The Chamber has announced it will have to rebuild the loss of assets and plans to seek additional capital from all sectors. The Chamber further stated, “Clear, consistent and investment friendly economic policy certainty as well as the application thereof, is critical to convince both local and foreign investors of a reasonable return on investment.”