14 June 2019

South Africa: Some Green Economic Shoots in April, but Don't Expect Q2 to Blossom As Confidence Remains Low

analysis

Fresh data suggests that South Africa's economy had some green shoots as autumn descended in April, but is still in a deep rut, especially when it comes to confidence. It remains to be seen if SA is in a recession after a sharp contraction in the first quarter of 2019. Even if the country has dodged the dreaded 'R' word, the economy is hardly blooming.

On Thursday 13 June, the RMB/BER Business Confidence Index (BCI) for Q2 cast a new shade of gloom over hopes that the economy was rebounding after shrinking by 3.2% in Q1.

"The RMB/BER Business Confidence Index (BCI) flatlined at a worryingly low 28 in the second quarter. More than seven out of 10 respondents, therefore, remained unsatisfied with current business conditions. The last time sentiment was this gloomy was two years ago, and before that, during the global financial-crisis-induced 2009 recession," Rand Merchant Bank said.

So the last time things were this bad was when Jacob Zuma was still at the helm and Cyril Ramaphosa's clinching of the ANC No. 1 spot was far from a done deal. The time before that the economy was caught in the throes of the global financial crisis. The...

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