SA business confidence affected by globalisation

The South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI), picked up by 3.3 index points to 87.9 last month, after shedding 2.3 index points in June.

Although the BCI bounced up in July, it did not recover to above the medium-term downward trend of business confidence, said Sacci economist Richard Downing.
Sacci is concerned that the present low domestic economic growth rate is not simply the consequence of cyclical or other short-term factors, but has deeper underlying problems.

There is an urgent need for persistent higher economic growth without which South Africa’s economic problems cannot be alleviated, says Downing.
Present circumstances provide an opportunity to change direction towards a more normative acceptable policy approach serving longer-term economic growth imperatives; in noticing such change, business confidence could turn for the better, explains Downing.

South Africa is becoming increasingly aware of the economic realities individual countries face, notwithstanding economic ties and relationships with the world economy, Africa, the Brics formation or other countries.

Globalisation implies that countries cannot escape from developments in the world economy – directly or even indirectly - through impacts on second tier countries.

Little can be done by a relatively small economy like South Africa to discharge the global effect, said Downing.