South African business sentiment rose its highest level since the first quarter of 2022, as constant electricity supply and political stability supported better business conditions.
A quarterly business confidence index compiled by FirstRand's Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research rose to 45 for the three months through December, up from 38 during the prior quarter, according to a report published on Wednesday.
“The continued absence of load-shedding and political stability following the May 29 election has helped with the recovery,” the report noted, using the local expression for power cuts. “An improvement in consumer demand seems to have provided a further boost to sentiment in the fourth quarter.”
The improvement marked the third consecutive increase in the gauge, which now stands almost 20 points above a recent low of 27 reached in the second quarter of 2023. It also underscores the brightening mood among businesses after the post-election formation of a broad governing coalition focused on boosting economic growth and job creation.
The alliance, which joins the African National Congress with the centrist Democratic Alliance and several smaller parties, was forced after the ANC lost its national majority in the vote for the first time since 1994.
Edited by: Bloomberg
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