![[South Africa]Business confidence wanes threatening gains in economic boom](South Africa.jpg)
[South Africa]Business confidence wanes threatening gains in economic boom
Business confidence in South Africa as an investment hub dropped in the fourth quarter, a development that puts to risk efforts at boosting economic growth and avoiding a downgrade in rating.
According to an index released by The Rand Merchant Bank, RMB, Bureau for Economic Research, the ratings fell to 38 points in the fourth quarter from 42 in the three months to September, weighed down by a weaker currency and high fuel prices.
“In no way do the fourth-quarter survey results imply that a notable economic recovery is upon us,” RMB said in a statement.
“Rather, the results continue to point to a 'muddle-through' scenario where growth, in all likelihood, continued to move broadly sideways at a low rate in the second half of the year.”
Ratings agencies Fitch and Moody's, which affirmed South Africa's investment-grade credit rating on Friday, cited the low level of business confidence as one of the downside risks to growth.
S&P Global Rating, which rates South African debt on the lowest investment level with a negative outlook, is expected to publish its decision on Friday.
Africa's most industrialised economy is forecast to grow by 0.5 percent this year. The government has been trying to avert a sovereign rating downgrade to “junk” status that would raise borrowing costs and deter investment.
