JOHANNESBURG (Reuters) – South Africa’s business confidence index rose for a second month in a row in December, due in part to political developments that have raised expectations of policy certainty and economic reforms, a chamber of commerce survey showed on Wednesday.
The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) rose to 96.4 in December from 95.1 in November.
“The BCI improved on a more positive business mood and political developments that are expected to put South Africa in a position for more encouraging business and economic policy options,” SACCI said in a statement.
The ruling African National Congress (ANC) elected businessman Cyril Ramaphosa as head of the party in December, sparking a rally in the rand and financial assets as investors view him as business-friendly and pro-reform.
The continent’s most industrialised economy slumped into recession in the first quarter of 2017 before recovering, but investor and consumer confidence have remained subdued due to political scandals and credit rating downgrades to junk.
Higher foreign merchandise trade volumes and lower inflation had a positive influence on the index in December, while retail sales and lower share prices had the biggest negative monthly impact on the index, the chamber said.