Despite indications that the global economy may remain depressed over the medium term, the successful hosting of the 2010 FIFA World Cup could boost domestic business confidence, the South African Chamber of Commerce and Industry (Sacci) said on Thursday.

The chamber, which reported a 2,8 point increase in its June Business Confidence Index (BCI) to 84,8 points, stated that the 2010 FIFA World Cup had already raised positive sentiment domestically and internationally.

"If the momentum provided by the [2010 FIFA] World Cup is appropriately harnessed and directed, longer-term economic benefits will be realisable. The thrust must be channelled in the direction of economic success and a business environment that augments and enhances business confidence," it emphasised.

However, Sacci also cautioned that the global economic recovery remained fragile.

Domestically, the chamber was also concerned over the deterioration of the current account of the balance of payments in the first quarter of this year and the "disturbing" expected job losses in the second quarter of the year.

While 79 000 jobs were lost in the first quarter of the year, Sacci was expecting further job losses for the second quarter of the year.

"These job losses occurred against wage rate increases more than double the inflation rate. With administered prices increasing by more than inflation, a wage rate more than double inflation and the weakening exchange rate, higher inflation can be expected in the medium term," it added.

Meanwhile, the BCI had recorded its fourth consecutive year-on-year increase in June.

Six subindices, namely the liquidations, imports, exports, inflation, real private sector borrowing and the rand exchange rate indices, had made positive month-on-month contributions to the BCI in June.

This was compared with only four out of the 13 subindices that had made positive month-on-month contributions during May.

A further three subindices, namely the manufacturing, vehicle sales and precious metals prices, had been neutral month-on-month in June, while the retail sales, construction of buildings, share prices and real financing cost had made negative month-on-month contributions in June.