The economy remains under pressure and is likely to remain sluggish as rolling blackouts and interest rate hikes erode business and consumer confidence.
Data released by the Reserve Bank shows that the composite business leading cycle indicator increased in September following two months of contraction.
The indicator shows lackluster prospects for economic performance.
Although it recorded an increase of 1.4 % in the month, it had recorded a contraction of 2.3 % the previous month.
Five of the nine available sub-indices increased, while the remaining four decreased.
STANLIB economist Kevin Lings elaborates. “The South African leading economic indicator improved in September measures month-on-month. However, when we look at the indicator over the past year, it remains negative, indicating that the economy is still under pressure. If we then consider the likely further increasing interest rates, the fact that inflation is above most people’s salary increases, and the continuation of persistent load shedding then there is no doubt that 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 the fact that Eskom does not have money for diesel will worsen rolling blackouts:
Source: SABC News (sabcnews.com)