Picture used for illustrative purpose. File

Gulf Today Report

South African business owners remain optimistic as the lift in restrictions showed growth in economic activity in the fourth quarter of the year.

A compilation by the Bureau for Economic Research of the Rand Merchant Bank business confidence index (BCI) indicated a 40 points increase in the fourth quarter from the 24 points in the third quarter.

The confidence of retailers and wholesalers has boosted in the quarter, showing an improvement from the seasonal Black Friday and festive holiday sales, mentioned the report.

According to the survey, a shift in consumer needs towards ready-made meals and work-from-home equipment boosted revenue. 

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However, demand might overcome supply if retailers do not buckle up and ensure the trend grows, the report added.

Ettienne Le Roux, chief economist at RMB said, "although the surge in business confidence is encouraging, it only signifies an economy that's out of intensive care, and not out of high care."

However, the growth in the fourth quarter has not pulled the country out of recession.

On Tuesday, the country’s central bank said a rise in projected government debt and problem mortgages is a “major threat” to the country’s finances.

South Africa was in recession way before the outbreak of coronavirus and forced lockdowns.

In Africa, the country has recorded the highest COVID-19 cases, 750, 000 confirmed cases and 20,000 deaths.