Photo by: Bloomberg
Business confidence in South Africa was up slightly in November, reflecting an anticipation of more conducive economic conditions, a survey showed on Wednesday.
The South African Chamber of Commerce and Industry (Sacci) said its monthly business confidence index rose to 95.1 in November from 92.9 in October.
South African businesses had taken heart from the fact that the country still had an investment grade sovereign credit rating from Moody's, despite falling into "junk" status with its peers S&P Global and Fitch, Sacci said.
In its most recent review, S&P downgraded South Africa's foreign currency debt to the second notch (BB) below investment grade, and local currency debt to the first notch below investment grade BB+, while Fitch left the rating of local and foreign currency debt unchanged at BB+.
Moody's however offered the country a reprieve, keeping its local and foreign currency debt at Baa3, the lowest investment grade.
"The breather afforded South Africa by Moody’s ... leave time for implementing measures (political and policy-wise) that would alleviate fiscal pressures and enhance economic performance," Sacci said. "The budget of 2018/19 in February 2018 will have to bear this out."
Ratings agencies have highlighted concerns over the direction of economic policy in South Africa as the government grapples with allegations of corruption swirling around senior officials including President Jacob Zuma.
Zuma denies using his political influence for his personal financial benefit.
Investors and analysts hope that the ruling African National Congress's conference this month will signal a shift onto a more viable economic policy path as the party braces for a stiff challenge at 2019 general elections.
"Public finance matters and economic growth prospects are important phenomena that have to be attended to urgently," Sacci said.
It said business sentiment had also been lifted in November by recent data from the revenue service pointing to a positive national trade balance.