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South African business confidence slips in second quarter of 2025 on tariff woes

South African business confidence slips in second quarter of 2025 on tariff woes

Zawya6 days ago

South African business confidence fell in the second quarter of 2025, pressured by trade uncertainties due to U.S. President Donald Trump's "Liberation Day" tariffs and local logistical constraints, a survey showed on Wednesday.
The business confidence index dropped to 40 points from 45 in the first quarter, according to a survey by the Rand Merchant Bank (RMB) and compiled by the Bureau of Economic Research.
South Africa's rand hit an all-time low in April, hurt by the trade war and the risk that the country's coalition government could lead to instability. However, it began to recover after the 90-day tariff pause.
Last week, the central bank cut its repo rate by 25 basis points to 7.25%, lowering its inflation and economic growth forecasts for this year and next year.
The repo rate would provide some relief, the RMB said on Wednesday, but also warned that more was needed to reignite the spark in the country's economy.
The coalition government has been working to boost the country's growth rate through reforms, but persistent challenges, such as logistics bottlenecks at ports and on the freight rail network, are improving only gradually.
Sectors such as retail, new vehicle dealers, builders contractors and manufacturing all reported a fall, RMB said, noting that the wholesale traders segment, which marked an increase in confidence, was the sole exception.
"The majority of the respondents are thus pessimistic about trading conditions. While remaining above the average of 2023 and 2024, confidence is now a touch below the long-term average level," RMB said.
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Janane Venkatraman)

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