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Business confidence in South Africa hits slow start

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Staff writer ▼ | February 9, 2015
Business confidence in South Africa registered its slowest start for the year in nearly two decades, a survey showed on Thursday, as the economy grapples with global and local headwinds, including electricity shortages.
South Africa
Africa   The South African Chamber of Commerce and Industry
Business confidence in SA edged up to 89.3 in January from 88.3 in Decemb The level was the lowest January print since 1997 and "does not project an improved state of affairs for the business mood in 2015," Sacci said in a statement.

South Africa's economy is expected to grow by 2.5% this year from an earlier estimate of 3.2%, the Treasury said in October.

Current electricity constraints could further strain growth. Power utility Eskom has warned that rolling blackouts would become an almost daily occurrence over the next three years as it battles to meet demand.

"Business confidence is not in a good shape at the moment," economist Richard Downing told reporters.

"The January 2015 Sacci Business Confidence Index (BCI) level is the slowest start to the Sacci BCI over the last 18 years since... January 1997 and does not project an improved state of affairs for the business model in 2015."

He said serious disruptions of the economy and business were already present, which would not only restrain economic activity, but may set the economy on an "indifferent" course in 2015.

"The pace of developments in the global and local economy at the start of 2015 could be described as exciting and/or perturbing, for better or for worse," said Downing.