South African business confidence declined from a five-month high in February as economic growth remains subdued and the rand weakened, the South African Chamber of Commerce and Industry said.
The index dropped to 93 from 94 in January, the Johannesburg-based chamber said in an e-mailed statement today. The measure is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as a stock-market index and currency.
“It is troubling that the financial environment appears to be restricting an already uncertain business mood,” the chamber said. “The continued weakening of the rand is of special concern.”
The Reserve Bank has held benchmark borrowing costs at the lowest level in more than 30 years to help stimulate an economy that expanded 2.5 percent last year, the slowest pace since a recession in 2009. The rand has dropped 6.8 percent against the dollar this year, the worst performer of 25 emerging-market currencies tracked by Bloomberg, making imports more expensive and pushing the trade deficit to a record.
The central bank cut its forecast for growth to 2.6 percent this year from a previous 2.9 percent, as demand for manufactured goods from Europe remains weak. The rand is the biggest risk to inflation, Reserve Bank Governor Gill Marcus said in January.
Growth in manufacturing, which accounts for about 15 percent of the economy, slowed to 2 percent in December, the slowest pace since September.