Industry body the South African Chamber of Commerce and Industry (Sacci) highlights that its Business Confidence Index is stabilising after reaching 125.4 index points in July, following a sharp decline in April.

New car sales, exports and cheaper energy have helped boost the index, while higher inflation and lower precious metal prices pulled it down.

Sacci says higher inflation has had a negative effect on business confidence in July when compared with July 2025 and that the number of foreign travellers in South Africa remained a positive driver for business confidence despite short-term instability.

The chamber says the country’s business climate was further sustained by the high global price of precious metals and increased merchandise import volumes, adding that global commodity prices remained a key driver of South Africa’s trade balance, currency strength and corporate earnings.

Notably, on the Africa Growth and Opportunity Act (Agoa), the US Senate has voted to approve a two-year extension of the Act, pushing the duty-free trade programme’s expiration date from December this year to the end of 2028. It is, however, still not yet clear if South Africa will continue to benefit under Agoa.

Meanwhile, Sacci also highlights that the continuing conflict in the Middle East and its effect of the price of crude oil and its impact on the supply of fuel is heavily weighing on its domestic economic forecasting.

The chamber also notes that South Africa’s creditworthiness and investment ratings have improved but a stricter South African Reserve Bank monetary policy stance and slow economic growth emphasise the impact of the uncertainty created by the present inflationary process.

“Although the South African economy must deal with slow performance and other structural challenges, the inflationary trend and the fiscal challenges remain despite continuous efforts to address the economically unsustainable demands for social adherence. Serious attention is needed, [especially for] the dire straits some local governments find themselves in,” the chamber says.