South Africa businesses are demonstrating optimism as the lift in lockdown restrictions have resulted in economic growth in the fourth quarter of the year. The contagion effect of the coronavirus pandemic has disrupted the South African economy to a significant degree.
According to the Bureau for Economic Research of the Rand Merchant Bank’s business confidence index (BCI) has shown a 40 points increase in the fourth quarter compared to 24 points in the previous quarter of the year. The increase has reached its highest level since the second quarter in 2018.
On the bright side, retailers and wholesalers’ interest has also increased in the fourth quarter. This reflects an improvement following the season Black Friday and holiday sales, according to the report. With that, its business confidence has climbed to the highest level in more than two years in the fourth quarter of the year.
This is attributed to easing of lockdown measures, which in turn has resumed economic activities spurring growth. In October, South Africa’s Finance Minister Tito Mboweni told the media “All additional pressures have been accommodated through adjustments elsewhere.”
He also added that “We must be careful to avoid the fate of countries like Argentina and Ecuador that defaulted on their debt this year.” The country has been slowly recovering from the protracted pandemic, which recorded 717,851 coronavirus infections and 19,053 deaths in its economy.
Last month, the finance ministry had expected the economy to contract deeply this year, and show signs of quick recovery following that.