South African Business Confidence Improves

JOHANNESBURG (Reuters) – South African business confidence saw its biggest year-on-year improvement in almost two years in November, boosted by higher tourist numbers, precious metal prices, and new vehicle sales, data showed on Tuesday.

The South African Chamber of Commerce and Industry reported that optimism about economic prospects under the new coalition government, formed this year, contributed to the rise in its Business Confidence Index (BCI).

The BCI increased to 118.1 in November, up from 114.2 in October and 110.2 in September.

This year-on-year increase in the BCI in November marked the largest improvement since COVID-19 restrictions were lifted in December 2022, according to SACCI.

Business sentiment has surged since June after the African National Congress lost its parliamentary majority in a national election and needed to share power with smaller parties, including the pro-business Democratic Alliance.

"The broader political representation in the administration of national government has facilitated a positive assessment of economic prospects by business," SACCI stated.

However, the uptick in business confidence has yet to translate into faster economic growth for Africa's most industrialized nation.

Gross domestic product unexpectedly shrank in the third quarter due to a drought affecting agricultural production, but analysts anticipate a return to modest growth in the upcoming quarters.