Business confidence in South Africa fell to a five-month low in March as a weaker rand, slowing trade activity and financial market volatility linked to the Iran War dampened sentiment among companies.
Data released on Tuesday by the South African Chamber of Commerce and Industry showed that its Business Confidence Index declined to 131.3 in March from 134.6 in February.
The chamber, which publishes the indicator every two months, said growing uncertainty was reflected in softer economic activity, particularly in retail trade and export volumes.
According to the report, businesses also expressed concerns about rising energy supply risks and costs as geopolitical tensions in the Middle East continue to affect global markets.
Despite the decline, the chamber noted that South Africa benefited from a strong improvement in business confidence recorded late last year, which has partly cushioned the economic impact of the conflict.
Some positive indicators also supported sentiment during the month. These included higher new vehicle sales, an increase in international tourist arrivals and easing inflationary pressures.
South Africa’s economy had begun to gain momentum last year, supported by improving investor confidence and government efforts to maintain low inflation and stabilise public finances.
Before the escalation of the Iran conflict, the government had projected faster economic growth in the coming years. However, analysts now expect that the official growth forecast of 1.6 percent for 2026 may need to be revised if global uncertainty persists.
Economists say the trajectory of business confidence in the coming months will depend largely on currency stability, global geopolitical developments and the resilience of domestic demand.
