JOHANNESBURG: Business confidence in South Africa recovered in October after slumping to its lowest in three decades in the previous month, boosted by a jump in export volumes and a firmer currency, a survey showed on Wednesday. The South African Chamber of Commerce and Industry’s (SACCI) monthly business index rose to 93.0 in October, its highest reading in three months, from 90.3 in September. “Positive monthly contributions mainly came from merchandise export volumes, the rand exchange rate, merchandise import volumes and real retail trade,” SACCI said.
Having slipped to one-month lows in mid-October after the state prosecutor said Finance Minister Pravin Gordhan would face fraud charges, the rand has since recovered after the charges were dropped, firming more than 9 percent against the dollar according to Thomson Reuters data. The business body however warned that the recovery was “against the odds of slow domestic and global economic performance and local socio-political distractions”, and that the business mood would suffer if the country was downgraded.
“An investment downgrade to junk status could make the process of economic recovery more cumbersome and costly,” SACCI said. Credit ratings agencies are due to visit South Africa in the coming weeks and publish their reviews by year-end. All three major agencies have warned that slowing growth and political infighting could trigger downgrades.
