Johannesburg - South Africa's business confidence fell in the fourth quarter, an outcome that jeopardises efforts to boost economic growth and avert credit rating downgrades.
The Rand Merchant Bank (RMB) index compiled by the Bureau for Economic Research 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.
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“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.
REUTERS