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Johannesburg - The positive trend in business confidence is
expected to gain momentum, the SA Chamber of Commerce and Industry (Sacci) said
on Wednesday.
In a statement, it said its Business Confidence Index (BCI)
had increased by one index point to 84.2 in April 2010, 2.8 points higher than
in April 2009.
"This represents only the second year-on-year increase
in 30 months," Sacci said.
Between April and March 2010, nine BCI sub-indices had a positive
effect on the BCI.
Four sub-indices had a negative impact on the BCI in April
2010 on a month-on-month basis.
Sacci said domestically there was growing support for the
view that most economic indicators had advanced beyond their lower turning
points.
"The key economic constraint remains low levels of
household consumption expenditure which restrains stronger business activity,"
Sacci said.
Although the 2010 readings of the BCI remained relatively subdued, the positive trend was expected to gain
momentum, mainly as a result of export led demand and improving global economic
circumstances.
"However, the public debt problems of Greece, does
present the risk of contagion if not addressed decisively."
Sacci said public debt management concerns in the PIIGS countries
(Portugal, Ireland, Italy, Greece and Spain) had the potential to put the eurozone
at risk and affect the global economy on a more intensive scale.
Apart from Greece, the other PIIGS countries were also under
constant scrutiny for possible public financial default.
"Although Greece
is regarded as an advanced economy, global market participants will also
critically view the fiscal and public finance policies of emerging
markets."
Sacci said that demand for financing for public sector programmes
in South Africa would be evaluated against the background of recent
developments in Greece and the other PIIGS countries.
"The Greece fault-line has once again made the world
aware of the fragility of the present recovery and policy-makers must tread cautiously
if the sustainability of the present recovery is to be assured."
- Sapa