THURSDAY, 5.45PM:
THE South African Chamber of Business’s Business Confidence Index (BCI) strengthened in February, on the eve of the Budget, Sacob announced on Thursday.
Regardless of the economy’s slowdown and the weakness of consumer demand, the BCI improved by 1,5%, after remaining static since November last year.
The falling inflation rate, expectations of lower interest rates, and strong performance on the JSE, which are among the indicators factored into the index, contributed to the rise. Nine indicators rose, while four fell.
Sacob said that this month’s Budget will have a crucial effect on business confidence, depending on whether a reassuring commitment to fiscal discipline and increasing financial controls is demonstrated by government.
“While no interest rate changes are expected before the launch of the Reserve Bank’s new market-related repurchase system on March 9, the slowdown in economic growth in the second half of 1997, and the falling inflation rate, suggest that further interest rate cuts are now overdue.”