South African business confidence dips in 02 2025, signaling economic slowdown

THE RMB/BER Business Confidence Index (BCI) fell by five points to 40 in the second quarter of 2025, reflecting pessimism about trading conditions amid a loss of economic momentum in South Africa.

- PHILIPPA LARKIN

The decline follows a stalled recovery from the first half of 2024, with only 40% of respondents in cyclically sensitive sectors expressing satisfaction with business conditions.

The data comes a day after Statistics SA said South Africa's gross domestic product increased by 0.1% in the first quarter of 2025, down from the increase of 0.4% in the fourth quarter of 2024.

The survey, conducted from May 7 to May 26, 2025, highlighted global trade uncertainties, strained US-South Africa diplomatic relations, and local logistical challenges as key drags on sentiment.

"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," it said.

The rand’s volatility, peaking past R19.90 to the dollar in April before recovering to below R18 to the dollar, added to the unease.

While the scrapping of a proposed VAT hike provided some relief, mixed signals about the stability of the Government of National Unity and the Democratic Alliance's role in it further clouded the outlook, RMB said.