ECONOMIC INDICATORS
Rand and land help drag business confidence to year’s low
Finance minister Nhlanhla Nene warns that weak business confidence will 'hinder a robust recovery in growth'
Business confidence has fallen to its lowest level in 2018 as a weaker rand and talk over land expropriation without compensation weigh on investors. The business confidence index compiled by RMB/BER declined for the second quarter in a row to 38, down from 45 in the first quarter when Cyril Ramaphosa became president. A score below 50 indicates dampened confidence. Low confidence constrains spending and investment, which results in shortfalls in government revenues and can lead to tax hikes and, subsequently, a negative cycle of low confidence and low spending, said NKC analyst Gerrit van Rooyen. The relationship between the index and GDP movements is historically tight, so the renewed downward trend in confidence is disconcerting, said RMB chief economist Ettienne Le Roux. Finance minister Nhlanhla Nene warned on Monday that weak business confidence would “hinder a robust recovery in growth”. Data last week showed SA is in recession for the first time since 2009. Signs of strain “...
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