- South African Business Confidence Drops
Economic recession, growing global uncertainty and low foreign direct investment have started hurting business confidence in Africa’s second-largest economy South Africa.
The country’s business confidence fell from 26 to 18 in the final quarter of 2019 when the economy plunged into recession.
In a report released by Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research, more than eight out of ten respondents surveyed were unhappy with the economic situation of the country.
Also, the survey of about 1,800 business executives was done before South Africa’s statistic announced the nation was in recession. Suggesting that the gauge could be even worse now that the nation is in a second economic recession in two years.
“For a small open economy already in recession, the timing of the prospective sharp Covid-19-induced global slowdown could not have been worse,” said Ettienne le Roux, RMB’s chief economist. “Exports will be hit, tourism flows will be affected, and supply-chain disruptions will be widely felt. All the while when South Africa must continue dealing with the growth-dampening effects associated with the corrective fiscal measures necessary to help stabilize public-sector finances.”
