South Africa’s business confidence rose in June after a dip the previous month, as positive sentiment stemming from the World Cup offset a gloomy global economic outlook, an industry survey showed on Thursday.
The South African Chamber of Commerce and Industry (SACCI) said its confidence index increased by 2,8 index points to 84,8 in June on expectations the momentum from the country’s successful hosting of the soccer tournament could yield long-term economic benefits.
“The World Cup 2010 tournament raised positive sentiment domestically and internationally,” the business chamber said in a statement.
“The success of the tournament could boost domestic business confidence despite indications that the global economy may suffer a depressed economic outlook for the medium term.”
South Africa has spent about R40-billion on preparations for the tournament, but analysts estimate only R13-billion of that will be recouped from foreign visitors’ spending.
However, Finance minister Pravin Ghordan last week said the tournament had sizable long-term benefits, on top of creating 130 000 jobs, that would be reaped after the tournament had ended.
SACCI said on Thursday it was aware of a faltering global economic recovery and its effects on the South African economy. Indications of continued job losses in the country were also a concern, it said.
SACCI said last month it was also worried about the inflation implications of high wage demands in Africa’s biggest economy.
“With … a wage rate more than double inflation and the weakening exchange rate, higher inflation can be expected in the medium term,” it said on Thursday. — Reuters