The South African Chamber of Business (Sacob) said on Thursday that its Business Confidence Index (BCI) had rebounded 1,4 index points in January after showing a drop in December last year.
The BCI dropped from 105,5 to 104,3 in December, but recovered to 105,7 in January.
Sacob said the less buoyant business confidence indicated divergent developments within South Africa’s economy.
”This contributes to a climate of uncertainty and inconsistency in which business must operate,” the chamber said in a statement released in Johannesburg.
”Such a situation also prevents the business mood from finding clear direction.”
The world economy’s sluggish performance, overshadowed by the debate over a possible war in Iraq, remained a concern and had a negative effect on world markets.
Sacob said it welcomed the government’s strong resolution that economic growth, job creation and poverty eradication remained priorities. In a recent report the International Monetary Fund also indicated that increased economic growth and poverty alleviation were the biggest challenges facing the country’s government.
”The Growth and Investment Summit scheduled for May 2003 could therefore be a turning point in putting South Africa on the desired path of an unequivocally market-related, higher and sustainable economic growth pattern…”
Sacob welcomed the strength of the rand against world currencies.
”Although the rand drifted sideways during January 2003, the fairly stable and strong position that it enjoys at the moment is a positive sign for business confidence.”
The release of the consumer inflation figures for December, which were lower for the first time in more than a year, as well as a drop in the producer inflation rate, led to speculation that lower interest rates could be reduced in the first half of this
year.
”Lower inflation should therefore confirm a milder monetary environment in the coming months.” – Sapa