March 13, 2019 / 10:06 AM / 2 months ago

South Africa's business confidence falls for fourth straight quarter

March 13 (Reuters) - South Africa’s business confidence fell for the fourth straight quarter to its lowest level since second quarter of 2017, a survey showed on Wednesday, as the country struggles to prop up its economy.

The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research fell to 28 points in the first quarter from 31 points in the fourth quarter last year, dropping further below the 50-mark that separates net positive and negative readings.

South Africa’s economy has been hurt by policy and political uncertainty. Investors are sceptical about President Cyril Ramaphosa’s ability to bring in reforms ahead of elections in May, while electricity blackouts nationwide have resumed.

In the first quarter, the business confidence index hovered very close to the low of 27 points hit in the second quarter of 2017, according to the survey of 1,700 business people.

Sentiment deteriorated in four of the five sectors, which comprise building, retail, wholesale, manufacturing and new vehicle trade confidence, the survey showed.

“South Africa will not be able to shift to a lasting higher growth and prosperity path without more short-term pain,” said Ettienne le Roux, chief economist at RMB.

Last week, the South African Chamber of Commerce and Industry said that business confidence deteriorated in February with its index falling to 93.4 from 95.1 in January, the lowest reading since September. (Reporting by Sangameswaran S in Bengaluru Editing by Saumyadeb Chakrabarty)

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