South African business confidence saw its biggest year-on-year improvement in almost two years in November, boosted by higher tourist numbers, precious metal prices and new vehicle sales, data showed on Tuesday.

The South African Chamber of Commerce and Industry said optimism about economic prospects under the coalition government formed this year had also contributed to the rise in its Business Confidence Index (BCI).

The BCI rose to 118.1 in November, up from 114.2 in October and 110.2 in September.

The year-on-year increase in the BCI in November was the largest since COVID-19 restrictions were lifted in December 2022, the South African Chamber of Commerce and Industry (SACCI) said.

Business sentiment has risen sharply since June, after the African National Congress lost its parliamentary majority in a national election and was forced to share power with smaller parties including the pro-business Democratic Alliance.

“The broader political representation in the administration of national government has facilitated a positive assessment of economic prospects by business,” SACCI said in a statement.

The uptick in business confidence has not yet translated into faster economic growth in Africa’s most industrialised nation.

Gross domestic product unexpectedly shrank in the third quarter as a drought hit agricultural production, but analysts expect a return to modest expansion in the coming quarters.

Reuters

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