The economy remains under pressure and is likely to remain sluggish as continued blackouts and interest rate hikes erode business and consumer confidence.
Data released by the Reserve Bank shows that the leading business cycle composite indicator increased in September after two months of contraction.
The indicator shows mediocre prospects for economic performance.
While it posted a 1.4% rise for the month, it had posted a 2.3% contraction the month before.
Five of the nine available sub-indices increased, while the remaining four decreased.
STANLIB economist Kevin Lings elaborates. “South Africa’s leading economic indicator improved in September month-on-month measures. However, when we look at the indicator over the last year, it is still negative, indicating that the economy is still under pressure. If we then consider the likely further increase in interest rates, the fact that inflation is outpacing most people’s wage increases, and the continuation of persistent burden reduction, then there is no doubt that the The South African economy is weak and is likely to end the year under further pressure,” says Lings.
In the video below, energy expert Chris Yelland says that Eskom not having money for diesel will make rolling blackouts worse: