North-West University’s (NWU’s) Policy Uncertainty Index (PUI) fell below the 50-mark baseline to 49.6 in the first quarter of this year, compared with 55.4 in the fourth quarter of 2017, confirming that South Africa may have turned the corner in its economic fortunes.

An increase beyond 50 reflects heightened policy uncertainty, while a decline in the PUI indicates reduced uncertainty.

The PUI registered a marginal improvement into positive territory for the first time since the fourth quarter of 2016, creating a platform from which further improvements in policy certainty are possible.

The improvement in the latest PUI is the outcome of a combination of favourable political and economic factors over the past three months, which have helped to ameliorate political and policy uncertainty.

NWU says the global economic outlook remains broadly supportive of the South African economy.

The tentative economic recovery of 2017 has now broadened into a more generalised upturn, with higher levels of business and consumer confidence, which reflect in the lower PUI.

An economic growth rate of 2% is possible for South Africa in the short term to 2020, says NWU.

However, despite positive economic developments, NWU warns that there are no grounds for complacency if South Africa wants to see sustained job-rich growth over the longer term.

“This will require the necessary economic reforms and there are also still long-term risks in the fiscal outlook.”

NWU adds that there may be some tough policy decisions to be made after the 2019 elections.

Additionally, the land reform issue and how it is managed will be an important determinant of future levels of policy uncertainty and investor confidence.

NWU says that the present strengthened levels of confidence need to be sustained and eventually translated into higher levels of investment to underpin renewed growth and job creation.

The country must continue to work towards a more transparent and predictable policy framework, which would help to further strengthen business and consumer confidence.